Japan’s factory declines accelerate as demand sags, PMI shows

JAPAN-ECONOMY/PMI (URGENT):Japan's factory declines accelerate as demand sags, PMI shows

Reuters
Updated1 Nov 2024, 06:03 AM IST
Japan's factory declines accelerate as demand sags, PMI shows
Japan’s factory declines accelerate as demand sags, PMI shows

TOKYO, - Japan's factory activity shrank at the fastest pace in three months in October as weak domestic and overseas demand hurts sales and output, a private-sector survey showed on Friday.

The final au Jibun Bank Japan manufacturing purchasing managers' index fell to 49.2 in October from 49.7 in September. It was slightly up from 49.0 reported in the flash reading.

But the index remained below the 50.0 threshold that separates growth from contraction for the fourth straight month.

"Firms often mentioned weakness in domestic and global demand had weighed on sales and output, notably in semiconductors and autos," said Usamah Bhatti at S&P Global Market Intelligence

The subindex of output extended its contraction to hit the lowest level since April due to weak new orders and excess inventories.

New orders also shrank and stayed below the 50.0 threshold for the 17th straight month, suggesting a further falls in sales due to lacklustre demand from the autos and semiconductor sectors. Firms also attributed the subdued domestic and overseas demand as the reason behind the deterioration in new orders.

Muted demand in the United States and China hurts new export orders, which shrank the most since March.

Input prices continued to rise in October but the pace of increase slowed to the softest since April. Manufacturers cited higher costs of raw material, labour, logistics and utilities as well as a weak yen as factors behind the inflation.

They raised selling prices in October due to higher operating expenses and their output prices grew to the highest in three months.

Manufacturers' outlook remained firm, though the level of optimism was little changed from September's 21-month low.

"Firms highlighted concern regarding the timing of the recovery from the current economic malaise," Bhatti said.

The Bank of Japan on Thursday kept ultra-low interest rates and signalled the need to examine the global economy. The central bank also projected inflation to move around its 2% target in coming years, stressing its resolve to keep hiking borrowing costs if the economy sustains a moderate recovery.

This article was generated from an automated news agency feed without modifications to text.

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First Published:1 Nov 2024, 06:03 AM IST
Business NewsNewsWorldJapan’s factory declines accelerate as demand sags, PMI shows

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