Japan: Manufacturing PMI moderates to seven-month low in June
June 23, 2017
The Nikkei Flash Manufacturing Purchasing Managers’ Index (PMI) fell from May’s revised 53.1 (previously reported: 52.0) to 52.0 in June. Although the print marked a seven-month low, the index remains above the 50-threshold that separates expansion from contraction in the manufacturing sector.
June’s result reflected that output and new orders expanded at a slower pace leading to less buoyant hiring activity. Moreover, stocks of purchases declined in June. With input costs expanding at a faster rate, firms increased the rate of prices charged to consumers. Paul Smith, Senior Economist at IHS Markit highlights that, although June’s print suggests slow growth in the manufacturing sector, “external demand is holding up well, and the sector continues to operate within a solid growth range. This is helping support employment gains, whilst also enabling firms to pass costs on to clients to the greatest degree in over two-and-a-half years.”