Japan: Services PMI rebounds in June but manufacturing PMI suffers
The Jibun Bank Composite Purchasing Managers’ Index (PMI), which combines the PMIs of the services and manufacturing sectors, climbed to 37.9 in June, up from 27.4 in May, 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 June.
The services PMI increased to 42.3 in June from 26.5 in May, as output and new business decreased but at a slower pace than in May. Moreover, employment in the services sector was broadly unchanged in June, ending a three-month run of decline. On the manufacturing side, the PMI declined to 37.8 from 38.4 as production fell at an accelerated pace. Employment levels in the manufacturing sector also fell at a faster pace in June than in May.
Joe Hayes, economist at IHS Markit, reflected:
“While the service sector downturn eased noticeably, goods production fell at an accelerated pace in June. The rate of decline in manufacturing order books remained severe, hinting that the shape of the recoveries in the services and manufacturing sectors could be very different. A two-speed recovery would undermine a sustainable return to pre-Covid-19 levels of economic activity.”