Japan’s crude steel output is expected to surge to a six year high in the fiscal year to March 2014, driven by strong demand for infrastructure works amid higher government spending and a rush to build houses ahead of a sales tax hike next year.

Japan's ministry of economy, trade and industry said that Japan’s crude steel output for the period is projected to rise 4.3% from a year ago to 111.88 million tonnes. That would be highest since Japan’s output hit a record of 121.51 million tonnes in fiscal year 2007.

Mr Ryuichi Yamashita director of iron and steel division at the ministry, told a news conference, referring to Prime Minister Shinzo Abe’s push to revitalise Japan’s economy said that “The biggest contributor for a high steel output this year is a rise in construction and infrastructure works on the back of Abenomics.”

Infrastructure spending tops Abe’s agenda alongside nudging the central bank to take aggressive steps to end deflation.

Steel products used for infrastructure works got a lift from his stimulus programme, which included additional spending of JPY 5 trillion (USD 47.95 billion) on public works. However, steel exports for fiscal 2013 are expected to drop from a year ago despite a weaker yen.