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Japan’s May factory activity growth slows as China lockdowns weigh -PMI -Breaking

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© Reuters. FILEPHOTO: A smoke billows from chimneys near Tokyo’s industrial district on February 28, 2011, REUTERS/Kim Kyung-Hoon

TOKYO (Reuters – Japan’s manufacturing activity grew the least in three consecutive months in May. China’s strict coronavirus curbs exacerbated supply disruptions, raising risks to the economy’s outlook.

According to manufacturers, there was a renewed increase in input prices due to the higher costs of commodity and material, such as fuel, and increased pressure from China’s economic lockdowns.

The seasonally adjusted final au Jibun Bank Japan Manufacturing purchasing management index (PMI), released Wednesday, fell to 53.3 in May, from 53.5 last month. It was the lowest pace since February. Separates expansion from contraction at the 50-mark.

“Both output and new orders rose at softer rates, with the latter rising at the weakest pace for eight months amid sustained supply chain disruption and raw material price hikes,” said Usamah Bhatti, Economist at S&P Global (NYSE:) Market Intelligence.

“Disruptions were further exacerbated in China by new lockdown restrictions, which contributed to an increase in delivery times for suppliers.”

According to the survey, overseas orders fell at an unprecedented rate since July 2020. However, input prices for manufacturers grew at the highest pace since August 2008.

According to the survey, manufacturers became more optimistic regarding output for the next 12 month based on hope that the Ukraine conflict would end and normalise supply chains.

Bhatti said, “This corresponds with an estimated 2.9% growth in industrial production for 2022.”

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