Japan’s manufacturing PMI fell to 54.1 in September — Channel NewsAsia
Japan’s manufacturing sector grew at its slowest pace in six months in September. The S&P Global Japan Manufacturing PMI fell to 54.1 points from 54.9 points in August, matching the preliminary estimate. S&P Global survey data reported by Channel NewsAsia indicate the industry expanded for the ninth consecutive month.
Slower order growth
An index reading above 50 points indicates growth, while a reading below signals a contraction in activity. Output continued to increase, but at the slowest pace in three months. Total new orders also rose more slowly, recording the weakest growth in four months after reaching a multi-year high in August.
Annabel Fiddes of S&P Global Market Intelligence said that companies reported slower growth in output and new orders. According to her, some customers adjusted their inventories after a period of stockpiling.
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Exports and employment
External demand remained more resilient: new export orders rose for the ninth consecutive month, with the pace of increase becoming the second fastest since January 2018. This was supported by higher demand in Asian economies and improved sales in the United States.
Employment in the sector increased for the 22nd consecutive month. The pace of employment growth remained close to the recent August high and was the second fastest since April 2018. Higher staffing levels, together with slower sales growth, contributed to a slowdown in the growth of outstanding orders to a six-month low.
Input cost inflation slowed to a six-month low, but manufacturers continued to raise selling prices at one of the fastest rates since late 2022. Companies remained optimistic about output growth over the next 12 months, citing, among other factors, demand related to semiconductors and artificial intelligence technologies. At the same time, the survey cited supply disruptions, component shortages and rising costs among the risks.
