Japan’s Manufacturing PMI further declined from 49.6 to 48.6 in September, falling short of the anticipated 49.9, marking the most pronounced contraction since February. PMI Services also receded from 54.3 to 53.3. PMI Composite, which gives a holistic view of the broader economy, tapered off from 52.6 to 51.8.
Usamah Bhatti, an Economist at S&P Global Market Intelligence, noted that the future doesn’t seem particularly rosy, with forward-looking indicators hinting at a possible slackening of demand and activity. While service firms did experience a rise, manufacturing segment reported a sharp decline in new orders, the most pronounced in seven months.
Another worrisome development is the reduced employment levels in the privatgesector. Bhatti stated, “As pressure on capacity eased, there was a renewed reduction in employment levels.” This trend was “the first since the start of the year and the quickest since August 2020.” He attributed this to companies not replacing those who voluntarily exited, often as a strategy “amid elevated cost burdens.”