Japan PMI July 2020

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Japan: Services and manufacturing PMI climb further in July

July 22, 2020

The Jibun Bank Composite Purchasing Managers’ Index (PMI), which combines the PMIs of the services and manufacturing sectors, climbed to 43.9 in July, up from 40.8 in June, according to a flash reading. Although the reading remained below the 50-threshold, and therefore indicated another month of decline in overall activity, the rate of decrease slowed in July.

The services PMI increased to 45.2 in July from 45.0 in June, as new business decreased, but at a slower pace than in June. Moreover, employment in the service sector decreased for the fifth month in a row. On the manufacturing side, the PMI rose to 42.6 in July from June’s 40.1 reading, as production and new orders decreased, but, again, at a slower pace than in June. However, the decline in employment levels in the manufacturing sector accelerated.

Bernard Aw, principal economist at IHS Markit, reflected:

“As the economy remained mired in a downturn, companies sought to contain costs and survive the pandemic by cutting jobs. Employment continued to fall in July, with factory jobs reduced at a sharper rate than seen in the service sector. Rising unemployment adds to fears that consumption may weaken in the coming months.”

FocusEconomics Consensus Forecast panelists project private non-residential investment drop 6.6% in 2020, which is up 1.3 percentage points over last month’s projection. In 2021, the panel sees private non-residential investment rising 3.2%.


Author:, Economist

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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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