Japan’s PMI Manufacturing remained stagnant at 49.6 in August, indicating a third consecutive month of sectoral contraction. According to Usamah Bhatti at S&P Global Market Intelligence, the rate of deterioration was “unchanged from July and only fractional,” primarily due to a “slower reduction in new orders.”
The report highlighted concerning trends in cost pressures. “Input prices rose at a quicker pace for the first time since September 2022, pushing the rate of input cost inflation to a three-month high,” Bhatti stated. The escalation in input costs was specifically attributed to high raw material prices, labor costs, and a weakened yen.
Despite these pressures, the report found that manufacturers increased their selling prices at the “weakest rate in two years,” indicating that companies may be absorbing the additional costs instead of transferring them to consumers.
The employment situation also emerged as a point of concern. Bhatti noted, “The rate of job creation broadly stalled, with the latest increase the slowest recorded in the 29-month sequence.”
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