Japan PMI May 2020


Japan: Services PMI improves in May but manufacturing PMI worsens

May 21, 2020

The Jibun Bank Composite Purchasing Managers’ Index (PMI), which combines the PMIs of the services and manufacturing sectors, climbed to 27.4 in May, up from April’s revised 25.8 reading (previously reported: 27.8), according to a flash reading. This suggests private sector activity declined in May from the previous month at a slower pace than in April, when activity declined at the fastest pace since current records began just over a decade ago.

Joe Hayes, economist at IHS Markit, reflected: “[This data provides] yet another shocking insight into the devastating impact of the COVID-19 outbreak.” Hayes added: “Taking the April and May PMI surveys together, we see that both are indicative of GDP falling at an annual rate in excess of 10%.”

The services PMI increased to 25.3 in May, up from a revised 21.5 in April (previously reported: 22.8). The manufacturing PMI, however, decreased to 38.4 in May, down from April’s revised 41.9 reading (previously reported: 43.7). The manufacturing sector suffered from a further deterioration in demand in May, at a faster pace than in the previous month.

Turning to the outlook, Joe Hayes said: “[…] The dynamics in the economy are clearly evolving. As Japan eases the state of emergency measures, the services economy can begin its gradual recovery. However, the damage to the manufacturing sector could continue to worsen as global trade conditions deteriorate”.

FocusEconomics Consensus Forecast panelists project private non-residential investment drop 7.5% in 2020, which is down 2.2 percentage points over last month’s projection. In 2021, the panel sees private non-residential investment rising 3.0%.

Author:, Economist

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Japan PMI Chart

Japan PMI May 20 20 0

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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