TOKYO, Aug 15 - Japan's all-industries index, a key gauge of economic activity across all sectors, is expected to have stood still in June as weak industrial output and sluggish retail sales offset the impact of a slight recovery in travel. A poll of 23 economists on Friday produced a median forecast of no change in the all-industries index as well as the tertiary sector index, which focuses on service industries. The figures are due to be announced next Friday. Forecasts ranged from a 0.5 percent fall to a 0.6 percent rise in the all-industries index and a 0.7 percent decline to a 1.1 percent increase in the tertiary sector index.
Kensuke Igarashi at Mitsui Sumitomo Bank was one of the more optimistic economists, forecasting a 0.5 percent rise in the tertiary sector index on the back of a strong pick-up in the services industry. "Travel transportation businesses should have improved due to the end of SARS," he said. "But on the other hand, retail and wholesale businesses are weak, judging from their sales figures. For all-industries, I predict a 0.2 percent rise." Taro Saito at NLI Research forecast a 0.1 percent fall in the tertiary sector index and a 0.4 percent drop in the all-industries index, saying industrial output was the main drag. Industrial production fell 1.2 percent in June from a month earlier on a seasonally adjusted basis, the Ministry of Economy, Trade and Industry said earlier.
The all-industries index rose 0.2 percent in May, while the tertiary sector index fell 0.1 percent.//