Japan: Manufacturing PMI falls to six-month low in May
May 24, 2017
The Nikkei Flash Manufacturing Purchasing Managers’ Index (PMI) fell from April’s revised 52.7 (previously reported: 52.8) to 52.0 in May. Although the print marked a six-month low, the index remains above the 50-threshold that separates expansion from contraction in the manufacturing sector.
May’s result reflected that output and new orders expanded at a slower pace leading to weaker hiring activity. Growth in stocks of purchases also moderated in May. With input costs expanding at a softer rate, firms diminished the rate of prices charged to consumers. Paul Smith, Senior Economist at IHS Markit highlights that, “although growth is being maintained at a decent clip, reports of “wait-and-see” attitudes amongst clients, excess warehouse inventories and recent sharp rises in raw material costs all served to undermine expansion during the month.”