Japan: Manufacturing PMI dips into negative territory in March
March 22, 2016
The Nikkei Flash Manufacturing Purchasing Managers’ Index (PMI) declined from February’s revised 50.1 (previously reported: 50.2) to 49.1 in March. The print marked the lowest reading since 2013 and, as a result, the index is now sitting below the 50-threshold that separates expansion from contraction in the manufacturing sector.
March’s print suggests that the appreciation of the yen and weak global demand are weighing on manufacturers’ sentiment. Nikkei analysts added that, “operating conditions at Japanese manufacturers deteriorated in March. Production and new orders both contracted, with output decreasing for the first time in nearly a year. This suggests industrial production will continue to fall. One of the key drivers behind the decline in total new work was a slump in international demand, as new export orders decreased at the sharpest rate in over three years. As a result, goods producers cut back on input buying and were less confident in hiring additional workers.”