Japan PMI September 2020


Japan: Services and manufacturing PMI remain in contractionary territory in September

September 21, 2020

The Jibun Bank Composite Purchasing Managers’ Index (PMI)—which combines the PMIs of the services and manufacturing sectors—rose to 45.5 in September according to a flash reading, up from August’s final figure of 45.2. As such, the reading remained below the 50-threshold, and therefore indicated the eighth consecutive month of declining overall activity.

The services PMI ticked up to 45.6 in September from 45.0 in August, likely on improving output and foreign demand. However, service sector employment dropped for the seventh month running, dragging on overall conditions. On the manufacturing side, the PMI inched marginally up to 47.3 in September from August’s 47.2 reading, as business confidence rose strongly and the pace of job shedding moderated.

Commenting on the results, Bernard Aw, principal economist at IHS Markit, reflected:

“Flash PMI survey data indicated a further decline in Japanese private sector output during September, setting the scene for further economic weakness in the third quarter. Other survey indicators pointed to a challenging recovery in the coming months. New order inflows continued to fall in September, reflecting subdued demand. This contributed to further evidence of spare operating capacity That said, the picture of the economy remained much improved when compared to the height of the pandemic during the second quarter.”

FocusEconomics Consensus Forecast panelists project private non-residential investment drop 3.6% in 2020, which is up 3.2 percentage points over last month’s projection. In 2021, the panel sees private non-residential investment rising 3.9%, which is up 1.0 percentage points from last month’s estimate.

Author:, Economist

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Japan PMI Chart

Japan PMI September 20 20 1

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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