Japan PMI Manufacturing was finalized at 49.2 in March, up from prior month’s 47.7.
Economist Usamah Bhatti from S&P Global Market Intelligence highlighted that the Japanese manufacturing sector showed signs of improvement at the end of Q1 2023, despite marking a fifth consecutive contraction.
Output and new orders experienced their softest declines in five months, but subdued market demand persisted in both domestic and international markets.
The lack of new incoming business led to firms preparing for an eventual rise in demand, with backlogs of work falling sharply for the sixth consecutive month. Additionally, manufacturers were increasingly stockpiling finished goods.
While input cost inflation slowed to its lowest rate since August 2021, selling price inflation remained high and accelerated, as Japanese goods producers partially passed on higher cost burdens to clients.
