Japan: Manufacturing PMI falls to an over-three-year low in May
May 24, 2016
The Nikkei Flash Manufacturing Purchasing Managers’ Index (PMI) declined from April’s revised 48.2 (previously reported: 48.0) to 47.6 in May. The print marked the lowest reading since December 2012 and, as a result, the index is dipping further below the 50-threshold that separates expansion from contraction in the manufacturing sector.
May’s print signals that spillovers from the two earthquakes that hit the Kyushu region in mid-April are still rippling through the Japanese economy. Nikkei analysts added that, “manufacturing conditions deteriorated at a faster rate mid-way through the second quarter of 2016, suggesting the aftermath of the earthquakes were still weighing heavily on goods producers. Both production and new orders declined sharply and at the quickest rates in 25 and 41 months respectively. One of the primary reasons behind the fall in total new orders was a marked contraction in foreign demand, which saw the sharpest fall in over three years. Goods producers were also less optimistic towards their hiring policies with the rate of job creation easing from April’s three-month record.”