Japan: Composite PMI rises, but remains in contractionary territory in March
The Jibun Bank Composite Purchasing Managers’ Index (PMI)—which combines the PMIs of the services and manufacturing sectors—rose to 49.3 in March according to a flash reading, up from February’s final figure of 45.8. As such, the reading moved towards but remained just below the 50-threshold, indicating a deterioration in operating conditions for the third consecutive month, albeit at a reduced rate.
Concurrently, the services PMI increased to 48.7 in March from 44.2 in February, on the back of a return to growth in new business as pandemic-related restrictions were eased in the month. On the manufacturing side, the PMI climbed to 53.2 in March from 52.7 in the prior month. The reading reflected growth in output and new orders, and marked the fourteenth consecutive month of improving conditions.
Commenting on the reading, Usamah Bhatti, economist at IHS Markit, reflected:
“Flash PMI data indicated that activity at Japanese private sector businesses fell for the third month running during March. The decline in output eased from the previous survey period however, and was only marginal as companies noted that Covid-19 cases had continued to reduce, allowing the lifting of the quasi-state of emergency across Japan. [However], Japanese private sector companies reported softer optimism regarding the year-ahead outlook for activity in March. Positive sentiment was the weakest for 14 months amid concerns regarding the economic impact of the Russia-Ukraine conflict.”