According to the most recent data, Japan’s industrial production dropped by more than 8 % in November from the previous month. This is the steepest one-month decline in Japanese industrial output on record, and is directly related to the demand destruction resulting from the global economic crisis. Japan’s economy is largely based on export-driven manufacturing, so the latest economic data indicates that worldwide demand for Japanese manufactured products is dropping like a lead stone.
Japanese automakers are among the major producers that have seen a sharp decline in orders for their products from overseas customers, especially in the United Sates. Many analysts and economists are issuing dire forecasts that the Japanese economy, highly dependent on export-driven trade, will contract sharply as the Global Economic Crisis grows more severe
“Production is falling off a cliff,” said Naoki Iizuka, a senior economist in a statement to the Reuters news agency. “The Japanese economy is unlikely to bottom out until October-December next year as output is expected to remain very weak until then,” he added, reflecting the gloomy cloud now hanging over the world’s second largest economy.