Japan PMI September 2021

Japan

Japan: Composite PMI improves in September, remains in contractionary territory

September 24, 2021

The Jibun Bank Composite Purchasing Managers’ Index (PMI)—which combines the PMIs of the services and manufacturing sectors—rose to 47.7 in September according to a flash reading, up from August’s final figure of 45.5. As such, while the reading moved closer to the 50-threshold, it still indicated a fifth consecutive deterioration in operating conditions from the prior month.

Concurrently, the services PMI rose to 47.4 in September from 42.9 in August, on the back of the second consecutive month of jobs creation and increased positivity regarding the outlook. On the manufacturing side, the PMI inched down to 51.2 in September from 52.7 in the month prior. The reading reflected easing new order growth and a decline in output, but nonetheless marked the eighth consecutive month of improving conditions.

Commenting on the outlook, Usamah Bhatti, economist at IHS Markit, reflected:

“Disruption to short-term activity is likely to remain until the latest wave of Covid-19 infections passes and restrictions enacted under state of emergency laws are lifted, currently scheduled for the end of September. Yet, Japanese private sector companies were optimistic that business conditions would improve in the year ahead, with the degree of optimism greater than in August. Positive sentiment stemmed from expectations that the impact of the pandemic will diminish following the acceleration of the vaccination programme, triggering a recovery in demand in both domestic and external markets.”

FocusEconomics Consensus Forecast panelists project private non-residential investment to rise 1.3% in 2021, which is up 0.1 percentage points over last month’s projection, and grow 4.8% in 2022.


Author:, Economist

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Japan PMI September 2021

Note: Jibun Bank Composite, Manufacturing and Services Purchasing Managers’ Index. Readings above 50 indicate an overall increase compared to the previous month, and below 50 an overall decrease.
Source: IHS Markit and Jibun Bank.


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