TOKYO – Electronics production in Japan will fell in 2005 but will rebound in 2006. That’s according to the Japan Electronics and Information Technology Industries Association.

JEITA forecast domestic production of $161.4 billion for 2005, down 3.5% from revised 2004 figures. The trade group had previously guided for a 2.8% gain.

In a statement, JEITA blamed a lingering inventory adjustment that began during the second half of 2004 and lasted about a year.

Production in 2006 is expected to grow 2.3% but will not match 2004’s results.

Next year’s gains will be continue to be driven by digital consumer electronics, flat-panel TVs and car navigation systems.

The World Cup and the 2006 Winter Olympics are also expected to boost electronics demand.