Japan PMI February 2020


Japan: Composite PMI slumps in February, raising chances of technical recession in Q1

February 21, 2020

The Jibun Bank composite Purchasing Managers’ Index (PMI) slumped to 47.0 in February from a revised 50.1 in January (previously reported: 51.1), according to a flash reading released on 21 February, suggesting private sector activity declined from the previous month at the fastest pace in nearly six years.

The services PMI dropped to 46.7 in February from a revised 51.0 in January (previously reported: 52.1). Service providers reported the spread of coronavirus adversely affected tourism, contributing to a fall in new sales for the first time since July 2016. The manufacturing PMI tumbled to 47.6 in February from a revised 48.8 in January (previously reported: 49.3) due to falling new orders.

Commenting on the result, Joe Hayes of IHS Markit said it dashes “any hopes of a first quarter recovery in Japan” and raises the prospect of a technical recession, after a heavy drop in gross domestic product was reported in the final quarter of last year.

FocusEconomics Consensus Forecast panelists expect private non-residential investment to rise 1.1% in 2020, which is unchanged over last month’s projection. In 2021, the panel sees private non-residential investment expanding 1.8%.

Author:, Economist

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Japan PMI Chart

Japan PMI February 20 20 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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