Japan’s manufacturing sector down for five months in a row, flash figures show
Business confidence was less upbeat in October.
Flash data compiled by S&P Global showed the overall health of Japan’s manufacturing sector continued to deteriorate for the fifth consecutive month in October on shrinking demand.
The headline au Jibun Bank Japan manufacturing purchasing managers’ index (PMI) remained unchanged at 48.5 this month compared to September, falling below the 50.0 neutral mark that separates expansion from contraction.
The flash estimates are released a week ahead of final data to serve as an early but accurate indicator of the sector.
For October, S&P noted that weak new orders caused production to drop at its fastest rate in eight months. Due to the lacklustre demand, manufacturers also slowed down on their purchasing activity and even slashed their staff levels for the first time since February 2021.
Factories also continued to grapple with high inflation according to the survey.
“Firms were also the least upbeat since January,” said Jingyi Pan, Economics Associate Director at S&P. “Such an outlook was reinforced by other forward-looking indicators from the survey, including the new orders and new export business indices, which both pointed to contractions from September, thereby signalling weaker business activity performance ahead.”