Japan's manufacturing output fell for the third month in a row in September, owing to a prolonged global supply deficit in the auto sector, heightening the danger of an economic contraction in the third quarter and casting doubt on the recovery.

The prognosis for the world's third-largest economy has been clouded by output interruptions across Asia and declining growth in China, which has relied heavily on exports to sustain development as the COVID-19 outbreak harmed domestic consumption.

“The risk looms that third-quarter gross domestic product turned negative,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

“Shipments of capital goods declined. That suggests business investment has not been growing.”

Factory output fell 5.4 percent in September compared to the previous month, according to official data released on Friday, owing to lower output of cars and general-purpose machinery.

After decreasing 3.6 percent in August and 1.5 percent in July, output shrank for the third month in a row.

It was the worst monthly reduction since a 6.5 percent dip in May, although it was less than the 3.2 percent drop predicted by economists in a Reuters survey.

As a result of the worldwide parts and chip shortage, global output fell for seven out of eight Japanese automakers in September.

Toyota Motor said on Thursday that global output fell 39.1% in September compared to the same month a year ago, with automakers' cuts affecting suppliers as well.