Japan’s factory output dips amid doubts over economic recovery - Al Jazeera English | Canada News Media
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Japan’s factory output dips amid doubts over economic recovery – Al Jazeera English

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Factory output in the world’s third-largest economy lost 1 percent in December from the previous month.

Japan’s factory output has shrunk for the first time in three months in December as a decline in machinery production outweighed a small rise in auto production, casting a cloud over the strength of the economic recovery.

Retail sales posted their third straight month of year-on-year gains in December as low coronavirus cases encouraged shoppers. Record infections this month driven by the Omicron variant, however, are expected to have hit consumer sentiment.

Factory output lost 1.0 percent in December from the previous month, data showed on Monday, pulled down by a decline in output of general-purpose and production machinery, including chip-making equipment and engines used in manufacturing.

That meant output, which fell faster than the 0.8-percent decline forecast in a Reuters poll of economists, dropped for the first time in three months.

“Output especially fell among capital goods makers, probably due to the strong impact from the chip shortages,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

“It suggests its impact is widening even though the focus has been on the car industry.”

Automakers have been forced to curb production even as demand in key markets such as China rebounds, while they also have had to contend with soaring semiconductor demand at consumer electronic companies.

Toyota Motor Co, the world’s biggest car seller, said this month it expected production to fall short of an annual target of 9 million vehicles for its current business year that runs until end-March due to the drag from the chip shortage.

Last week, motor maker Nidec Corp’s third-quarter operating profit dipped as rising material prices and a shortage of semiconductors squeezed margins.

The data showed output growth of cars and other vehicles slowed to 1.5 percent from the previous month in December, much weaker than the 43.7 percent surge in November and a 15.9 percent jump in October.

‘Possibility growth will be negative’

Some companies in the car industry had weathered the competition for chip supply better than others, a government official said.

“Procurement is increasing, but the situation is different from firm to firm,” the official said.

Manufacturers surveyed by the Ministry of Economy, Trade and Industry (METI) expected output to grow 5.2 percent in January and 2.2 percent in February.

The forecasts did not include production cuts made after the January 10 survey deadline, the official said.

The world’s third-largest economy is projected to expand an annualised 4.5 percent in the current quarter, a Reuters poll showed this month, but some economists warned of downside risks to the rosy projections.

First-quarter growth faced a hit to private spending from the coronavirus spread and declines in car output, said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.

“There’s a possibility growth will be negative in the January-March period, though it will depend on the infection situation,” Shinke wrote in a report.

Separate data showed retail sales were weaker than expected, rising 1.4 percent in December from a year earlier, which was smaller than the expected 2.7 percent rise.

That marked the third straight month of increase for sales, which were lifted by stronger demand for general merchandise and food and beverages, though year-on-year growth slowed.

Japan has seen a surge in COVID-19 cases caused by the Omicron variant in recent weeks, forcing the government to roll out tighter curbs that now cover 70 percent of the country.

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Minimum wage to hire higher-paid temporary foreign workers set to increase

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OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.

Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.

The change is scheduled to come into force on Nov. 8.

As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.

The program has also come under fire for allegations of mistreatment of workers.

A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.

In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.

The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.

According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.

The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.

Temporary foreign workers in the agriculture sector are not affected by past rule changes.

This report by The Canadian Press was first published Oct. 21, 2024.

— With files from Nojoud Al Mallees

The Canadian Press. All rights reserved.

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PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

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OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

The Canadian Press. All rights reserved.

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Statistics Canada says levels of food insecurity rose in 2022

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OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

The Canadian Press. All rights reserved.

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