Japan: Manufacturing PMI continues to recover in April
April 23, 2019
The Nikkei flash manufacturing Purchasing Managers’ Index (PMI) rose from March’s 49.2 (previously reported: 48.9) to 49.5 in April. Despite the increase, the index sits below the 50-point threshold that separates expansion from contraction in the manufacturing sector.
April’s reading reflected that all-important output and new orders declined at a slower rate compared to March’s print. Moreover, employment growth gained further steam in the same month. Stocks of purchases decreased in April following an increase in March, while suppliers’ delivery times continued to lengthen. The decline in new export orders accelerated in April, reflecting an weak global demand.
Joe Hayes, economist at IHS Markit, which compiles the survey, noted that:
“Japan’s manufacturing sector remained stuck in its rut at the start of Q2, with the factors which have prohibited any growth such as US-Sino relations, growth fears in China and the turn in the global trade cycle, all remaining prominent risks. Export orders dipped at a stronger rate in April, domestic demand for goods was similarly weak and firms cut their stocks and scaled back production. Yet again, the service sector will need to pick up any slack to help keep Japan’s economy afloat.”