Japan PMI October 2021


Japan: Composite PMI returns to expansionary territory in October

October 22, 2021

The Jibun Bank Composite Purchasing Managers’ Index (PMI)—which combines the PMIs of the services and manufacturing sectors—rose to 50.7 in October according to a flash reading, up from September’s final figure of 47.9. As such, the reading rose above the 50-threshold, indicating the first improvement in operating conditions from the prior month since April.

Concurrently, the services PMI rose to 50.7 in October from 47.8 in September, on the back of increased positivity regarding the outlook. On the manufacturing side, the PMI increased to 53.0 in October from 51.5 in the month prior. The reading reflected increases in new order growth and output, and marked the ninth consecutive month of improving conditions.

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

“Activity at Japanese private sector businesses returned to expansion territory at the start of the fourth quarter of 2021, according to the latest flash PMI data. The rise was the first in six months and came as the dominant service sector registered an increase in activity for the first time since January 2020. Moreover, manufacturers reversed the slight decline seen in September to indicate growth for the eighth time in nine months. Panel members commonly associated the slight recovery to a reduction in Covid-19 cases and looser pandemic restrictions.”

FocusEconomics Consensus Forecast panelists project private non-residential investment to rise 1.5% in 2021, which is up 0.2 percentage points over last month’s projection, and grow 5.2% in 2022.

Author:, Economist

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Japan PMI Chart

Japan PMI October 2021 0

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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