Japan PMI July 2017


Japan: Manufacturing PMI declines to eight-month low in July

July 24, 2017

The Nikkei Flash Manufacturing Purchasing Managers’ Index (PMI) fell from June’s revised 52.4 (previously reported: 53.1) to 52.2 in July. Although the print marked an eight-month low, the index remains above the 50-threshold that separates expansion from contraction in the manufacturing sector.

July’s result reflected that output and new orders expanded at a weaker pace than in June. Moreover, purchasing activity declined in the same month. On the upside, hiring activity strengthened as, despite July’s moderation in the overall index, manufacturing activity remains well entrenched into positive territory. With input costs expanding at a slower rate, firms moderated the rate of prices charged to consumers. Paul Smith, Senior Economist at IHS Markit highlights that, although June’s print suggests slow growth in the manufacturing sector, “the slowdown was driven by stagnation in export orders, amid reports of weaker demand from South East Asia markets. Nonetheless, the sector continues to add jobs, with employment growth remaining amongst the best since the financial crisis, whilst optimism hit its highest level in five years of data collection.”

Author: Ricard Torné, Lead Economist

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Japan PMI Chart

Japan PMI July 2017

Note: Nikkei Manufacturing Purchasing Managers’ Index. Readings above 50 indicate an expansion in the manufacturing sector while readings below 50 indicate a contraction.
Source: IHS Markit and Nikkei.

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