Industrial production remained virtually unchanged in the third quarter 1997. Production in the fourth quarter is expected to decrease on the whole. This is because inventory adjustment which has derived from weak domestic sales, began to spread from consumer durables and construction-related goods to materials.
Meanwhile, the December Tankan shows that the increasing trend in current profits is expected to continue for the large manufacturing firms (excluding petroleum refinery) in fiscal 1997, while those in the nonmanufacturing sector (excluding electricity and gas) are projected to decline. Forecasts of current profit growth in both the manufacturing and nonmanufacturing sector have been revised downwards since the September survey.