Japan: Composite PMI rises into expansionary territory in September
The au Jibun Bank Composite Purchasing Managers’ Index (PMI) rose to 50.9 in September from August’s 49.4. As a result, the index rose above the 50.0 no-change mark, signaling an improvement in private sector operating conditions from the previous month.
The manufacturing PMI stood at 51.0 in September, down from August’s 51.5. Lastly, the services PMI activity index increased to 51.9 in September (August: 49.5).
The expansionary print in August was driven by the services sector, which benefitted from looser Covid-19 restrictions. Services output rebounded, while growth of new orders and employment picked up. However, the rise in the composite PMI was limited by a weaker manufacturing PMI. Output and new orders in the manufacturing sector contracted for the third consecutive month and did so at a sharper rate. That said, employment growth rose. Three common themes emerged for both sectors: one, Typhoon Nanmadol appeared to disrupt business activity; two, the yen’s weakness led input and output inflation to grow; which, three, caused business confidence to deteriorate.