Japan: Manufacturing activity still growing, despite first fall in four months for manufacturing PMI - Nomura

Research Team at Nomura points out that Japan’s Manufacturing PMI was down in March for the first time in four months but the overall manufacturing activity continues to grow, on back of brisk output and new orders.

Key Quotes

“Japan's manufacturing PMI for March came in at 52.6, down 0.7pt from February. Although the PMI was down for the first time in four months (since November 2016), it was above the 50 watershed between expansion and contraction for a seventh straight month, in an indication that manufacturing activity continues to expand.”

“Looking at the five component indices, the manufacturing PMI was weighed down by negative trends in the output index (down from 54.1 in February to 53.4 in March), the new orders index (down from 54.2 to 52.9), the supplier delivery times index (up from 48.5 to 48.8; an increase in this index pushes down the headline index), and the stock of items purchased index (down from 50.3 to 49.9).”

“The employment index was unchanged from the previous month. While not included in the calculation of the manufacturing PMI, the new export orders index came in at 52.7, down 1.6pt from 54.3 in February. However, the new export orders index similarly has remained above the aforementioned 50 threshold for a seventh straight month, in an indication that exports remain on a growth trajectory.”