Official figures have revealed that Japanese manufacturing has dropped at its fastest rate on record, with companies closing factories and cutting jobs. Industrial output in Japan plummeted by a record 8% in November compared with the previous month.
It is the biggest slump in production in Japan since the Government began releasing figures 55 years ago, in 1953. The biggest falls came in production of cars, machinery and electronics and followed announcements of large cutbacks by companies including Toyota and Sony. At the same time, unemployment rose to nearly 4% as temporary workers were laid off in their thousands. More than 2.5 million people were out of work in Japan in November, a rise of 100,000 compared with the year before. Those on temporary contracts are worst affected. The new numbers released by Japan's Ministry of Economy, Trade and Industry, suggest industrial output will continue to decline in December. Consumer prices rose 1% from a year earlier, driven by higher costs of basic necessities such as food, fuel and electricity. The Japanese government has already predicted that the economy will not grow in 2009. Business confidence has plummeted in recent months. Interest rates are pegged at just 0.1%, lower than US rates. The government has announced several economic stimulus measures. Japan is the world's second-largest economy, and Asia's largest, so has been directly hit by the slump in demand caused by spreading global recession.