Japan: Composite PMI holds steady in December
December 16, 2019
The Jibun Bank composite Purchasing Managers’ Index (PMI) was unchanged in December from November’s revised 49.8 reading (previously reported: 49.9). Therefore, the index remained below the 50.0 threshold which separates expansion from contraction in the private sector of the Japanese economy for the third successive month.
The services sector continued to recover in December, with output growing at a faster pace than in November, following a fall in output in October on the back of an increase in the sales tax that month. The manufacturing sector, however, continued to stay in an output-contracting malaise in December, dragging on the overall PMI reading.
Looking forward, Joe Hayes, an economist at IHS Markit, said, “the recent stimulus package launched by Abe has the potential to breathe life back into the domestic economy. Indeed, this will certainly alleviate pressure on the Bank of Japan to take immediate policy action if the economic outlook worsens.”
Author: Edward Gardner, Economist