Japan PMI July 2019

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Japan: Manufacturing PMI edges up in July but remains in contraction

July 24, 2019

The Jibun Bank flash manufacturing Purchasing Managers’ Index (PMI) rose from June’s 49.3 (previously reported: 49.5) to 49.6 in July. Therefore, the index remains below the 50-point threshold that separates expansion from contraction in the manufacturing sector.

July’s print reflected a slower decline in output and new orders—both from the export and domestic markets—compared to the June reading, as well as a pickup in employment growth. Against this backdrop, backlogs of orders shrank at the same rate as in the previous month; suppliers’ delivery times lengthened at a milder pace, purchasing activity declined more sharply; and stocks of both purchases and finished goods also fell. On the price front, input inflation softened while output charges declined at a heightened rate. Lastly, manufacturers were less optimistic about the near-term outlook than in June.

Joe Hayes, economist at IHS Markit, which compiles the survey, noted that:

“The manufacturing sector’s plight continued, […] where production was cut in July for the seventh successive month. Weak demand from China remained a key factor behind sluggish demand for Japanese goods. Heightened frictions between Japan and South Korea also add downside risk to the manufacturing supply chain in Japan, creating additional slack that services may once again have to compensate for.”

FocusEconomics Consensus Forecast panelists see industrial production rising 0.4% in 2019, which is down 0.1 percentage points over the previous month’s projection. For 2020 the panel expects industrial production to expand 0.8%.


Author:, Economist

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Japan PMI July 2019

Note: Jibun Bank 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 Jibun Bank.


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