HomeLive CommentsJapan PMI manufacturing dropped to 48.5, chance of recession in 2019 rises

Japan PMI manufacturing dropped to 48.5, chance of recession in 2019 rises

Japan PMI manufacturing PMI dropped to 48.5 in February, down from 50.3. That’s the lowest level in 32 months and the first contraction reading since 2016. Markit noted that “deterioration in manufacturing sector reflects stronger falls in production and new orders.” Also, “future output expectations turn negative for the first time since November 2012.”

Commenting on the Japanese Manufacturing PMI survey data, Joe Hayes, Economist at IHS Markit, which compiles the survey, said:

“Survey data for Japan’s manufacturing sector ebbed into negative territory in February, reflecting sharper reductions in demand and production. Although the initial Q4 estimate revealed a bounce back in economic activity, the PMI suggests underlying business conditions are unfavourable. This was further highlighted by output expectations turning negative for the first time in over six years, which comes as no surprise given the international headwinds Japanese manufacturers are facing such as a China slowdown and the global trade cycle losing further steam. Unless service sector activity can offset manufacturing weakness, the chance of Japan entering a recession in 2019 looks set to rise.”

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