Japan PMI manufacturing was finalized at 52.5 in August, unrevised, up from July’s 52.3. Markit noted in the released that “production rises amid faster new order growth”, “export orders fall for second time in three months”, and “geopolitical risks weigh on business sentiment”.
Commenting on the Japanese Manufacturing PMI survey data, Joe Hayes, Economist at IHS Markit, which compiles the survey, said:
“Japan’s goods-producing sector continued to record growth at the midway point in Q3, extending the current stretch of expansion to two years – the longest since the global financial crisis. Survey data signalled a moderate improvement in the health of the sector, supported by an accelerated influx of new orders.
“That said, survey data indicated the upturn in demand was domestic-led, with export sales falling over the month. Potential escalations in trade conflict also contributed to a softening of business confidence.
“Overall sector growth remained relatively weak compared to Q1 and Q2 averages. Sub-index data continues to point to delayed input delivery times. Meanwhile, the non-replacement of retiring staff contributed to a further slowing of job creation. With this in mind, production line capabilities could be restrained over the coming months if these trends continue, irrespective of demand pressures.”
