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Japan’s Sept manufacturing activity growth slows

© Reuters. FILE PHOTO. An employee works at the Kawasaki plant of Mitsubishi Fuso Truck and Bus Corp. The line is owned by Germany’s Daimler AG in Kawasaki. It is located south of Tokyo. May 18, 2020. REU

TOKYO (Reuters) – Japan’s factory activity grew at the slowest pace in eight months in September as output and orders contracted, while that of the services sector remained in its downturn, underscoring the protracted impact of the coronavirus pandemic.

According to au Jibun Bank Flash Japan Manufacturing PMI (Purchasing Managers’ Indicator) fell from 52.7 the month before, and was seasonally adjusted at 51.2. This is the lowest growth rate since January.

The rapid spread and severe shortages in semiconductor chips has caused disruptions to parts supply, which have impacted factory activity.

Data from September showed that Japanese manufacturing output fell at its fastest pace for a whole year while new orders decreased at their fastest speed over the past 10 months.

Although the au Jibun Bank Flash Services PMI index continued to be in contraction, its final month’s revised 42.9 was seasonally adjusted at 47.4. This was their lowest point since the heights of Japan’s COVID-19 recession of May 2020.

Although it was still in contraction, the au Jibun Bank Flash Japan CompositePMI index, which includes both manufacturing and service, rose to 47.7, compared with August’s final 45.5.

The Flash PMI data suggested that Japanese private-sector activity was down further in September,” stated Usamah Bhatti from IHS Markit.

“The rate of decline in September was less than August’s, with the greater services sector seeing a notable easing in contraction.

According to the survey, manufacturers saw their input prices rise at the fastest rate since September 2008.

Bhatti explained that the private sector’s input prices rose at the fastest rate in 13 years. The rise was attributed to increased raw material, freight costs and employee costs due to supply shortages.

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Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.