Japan: Composite PMI in expansionary territory for first time in 15 months in April
The Jibun Bank Composite Purchasing Managers’ Index (PMI)—which combines the PMIs of the services and manufacturing sectors—inched up to 50.2 in April according to a flash reading, marginally above March’s final figure of 49.9. As such, the reading moved just above the 50-threshold, and therefore indicated the first improvement in operating conditions after 14 consecutive months of worsening operating conditions.
The services PMI remained unchanged at 48.3 in April, matching the reading from March, with new business contracting to for the 15th month in a row. On the manufacturing side, the PMI rose to 53.3 in April from March’s 52.7 reading, thus marking the third consecutive month of improving conditions and the highest print since April 2018, as both output and new orders expanded rapidly.
Commenting on the outlook, Usamah Bhatti, economist at IHS Markit, reflected:
“While some Japanese private sector businesses noted that a resurgence in Covid-19 cases could dampen prospects in the second quarter of the year, firms remained optimistic that overall business activity would improve in the coming 12 months. That said, there is concern the impact of the pandemic will be prolonged further.”