Japan PMI October 2017


Japan: Manufacturing PMI inches down in October

October 24, 2017

The Nikkei Flash Manufacturing Purchasing Managers’ Index (PMI) fell from September’s revised 52.9 (previously reported: 52.6) to 52.5 in October. As a result, the index remains above the 50-threshold that separates expansion from contraction in the manufacturing sector.

October’s decline was driven by deteriorations in both output and new orders. A strong labor market led job creation to improve markedly in October, while stocks of purchases were unchanged. Regarding price developments, companies continued to largely absorb price pressures as the increase in output charges was marginal.

Joe Hayes, Economist at IHS Markit, stated that, “although still improving solidly, the Japanese manufacturing sector appeared to lose some momentum in October. […] Signs of slowing growth coincided with faltering optimism, as the level of positive sentiment fell to an 11-month low.”

FocusEconomics Consensus Forecast panelists see industrial production rising 2.2% in 2018, which is up 0.2 percentage points over the previous month’s projection. For 2019 the panel expects industrial production to expand 1.7%.

Author: Ricard Torné, Lead Economist

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Japan PMI Chart

Japan PMI October 2017

Note: Nikkei 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 Nikkei.

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