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Japan PMI January 2021

Japan: Manufacturing and services PMIs both fall at start of 2021

The Jibun Bank Composite Purchasing Managers’ Index (PMI)—which combines the PMIs of the services and manufacturing sectors—fell to 46.7 in January according to a flash reading, down from December’s final figure of 48.5. As such, the reading moved further below the 50-threshold, and therefore indicated the twelfth consecutive month of worsening operating conditions.

The services PMI dropped to 45.7 in January from 47.7 in December, on stronger deteriorations in output and demand. On the manufacturing side, the PMI inched down to 49.8 in January from December’s 50.0 reading, as falling output and employment levels dampened operating conditions at the outset of the year.

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

“Short-term activity will undoubtedly be hampered by rising Covid-19 cases, as the government declared a state of emergency in Tokyo and introduced further measures to curb rising infection rates. As a result, positive sentiment weakened across the private sector. Firms are still predicting growth over the coming 12 months, although concern remains that the impact of the pandemic will be prolonged.”

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