Mount Fuji, Japan

Japan PMI February 2019

Japan: Manufacturing sector contracts for first time in over two years in February

The Nikkei flash manufacturing Purchasing Managers’ Index (PMI) declined sharply from January’s revised 50.3 (previously reported: 50.0) to 48.5 in February, the lowest print since July 2016. As a result, the index now sits on the 50-point threshold that separates expansion from contraction in the manufacturing sector.

February’s reading reflected that all-important output and new orders declined at a faster rate compared to the previous month. As a result, employment growth slowed in the same month. Stocks of purchases decreased at a slower rate, while suppliers’ delivery times continued to lengthen. New export orders continued to fall in February, reflecting an uncertain global economic outlook. Moreover, price pressures remained subdued, suggesting that Japan is still far from achieving sustained increased in consumer prices.

Joe Hayes, economist at IHS Markit, which compiles the survey, noted that:

“Although the initial Q4 estimate revealed a bounce back in economic activity, the PMI suggests underlying business conditions are unfavourable. This was further highlighted by output expectations turning negative for the first time in over six years, which comes as no surprise given the international headwinds Japanese manufacturers are facing such as a China slowdown and the global trade cycle losing further steam. Unless service sector activity can offset manufacturing weakness, the chance of Japan entering a recession in 2019 looks set to rise.”

Japan Industrial Production Forecast

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest