Japan PMI December 2020


Japan: Manufacturing PMI inches closer to expansion in December; Services PMI falls

December 16, 2020

The Jibun Bank Composite Purchasing Managers’ Index (PMI)—which combines the PMIs of the services and manufacturing sectors—fell to 48.0 in December according to a flash reading, marginally down from November’s final figure of 48.1. As such, the reading moved further below the 50-threshold, and therefore indicated the tenth consecutive month of worsening operating conditions.

The services PMI ticked down to 47.2 in December from 47.8 in November, on deteriorating output and demand. On the manufacturing side, the PMI ticked up to 49.7 in December from November’s 49.0 reading, as production and new orders fell at weaker rates this month, and employment levels rose for the first time since February.

Commenting on the outlook, Usamah Bhatti, an economist at IHS Markit, reflected:

”Despite the short-term disruption caused by a resurgence in coronavirus disease 2019 (Covid-19) cases, Japanese private sector businesses were optimistic that business conditions would improve in the year-ahead. Positive sentiment stemmed from the expectation that there would be an end to the pandemic which would fuel both domestic and international demand.”

FocusEconomics Consensus Forecast panelists project private non-residential investment to rise 1.9% in 2021, which is down 0.5 percentage points over last month’s projection, and grow 3.6% in 2022.

Author:, Economist

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Japan PMI Chart

Japan PMI December 20 20 0

Note: Jibun Bank Composite, Manufacturing and Services Purchasing Managers’ Index. Readings above 50 indicate an overall increase compared to the previous month, and below 50 an overall decrease.
Source: IHS Markit and Jibun Bank.

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