Japan PMI September 2018


Japan: Manufacturing PMI stabilizes in September

October 2, 2018

The Nikkei flash manufacturing Purchasing Managers’ Index (PMI) came in at 52.5 in September, unchanged from August’s print. As a result, the index remained comfortably above the 50-point threshold that separates expansion from contraction in the manufacturing sector.

September’s reading was primarily driven by a solid expansion in output. That said, output growth slowed to a 14-month low, leading to a stronger accumulation in backlogs of work. Although new business accelerated in September, export orders posted a further decline. Moreover, input delivery times lengthened markedly, negatively affecting operating conditions. As demand remains relatively strong, hiring strengthened in September. Higher global commodity prices, especially for energy, continued to fuel input prices, which translated into increased output charges. Looking forward, despite remaining in positive territory, business confidence declined to the lowest level since November 2016.

Joe Hayes, Economist at IHS Markit, added that:

“Growth in the Japanese manufacturing sector was sustained in September, rounding off a fairly robust quarter of expansion. That said, the average PMI reading for Q3 was notably weaker than those for the first and second quarters of 2018, suggesting weaker momentum.”

Japan Industrial Production Forecast

FocusEconomics Consensus Forecast panelists see industrial production rising 2.8% in 2018, which is down 0.2 percentage points from last month’s projection. For 2019 the panel expects industrial production to expand 2.2%.


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Japan PMI Chart

Japan PMI September 2018

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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