Photo by Martin Geiger on Unsplash
Japan’s factory activity slumps for sixth straight month in November
Job cuts are still ongoing in the manufacturing industry.
The overall health of Japan’s manufacturing sector deteriorated for the sixth straight month in November as demand remained weak, flash figures showed.
The headline au Jibun Bank Flash Japan manufacturing purchasing managers’ index (PMI) slipped further to 48.1 this month from 48.7 in October, sliding below the 50.0 neutral mark that separates deterioration from expansion.
PMI has been on the contraction territory since June, with the November drop marking its steepest decline since February.
Japanese factories reported scaling back output this month while new orders dropped at an accelerated pace.
“Despite the weakness in new orders, Japanese private sector companies mentioned that the level of outstanding business was unchanged, ending a four-month sequence of decline,” said Usamah Bhatti, economist at S&P Global, which compiled the survey.
The flash estimates serve as an early but accurate indicator of market activity released a week ahead of final data.
Early results of the survey showed manufacturers are catching up with their backlogs fast as pressure on capacity softens, prompting them to reduce staff levels for two months in a row.
Japanese firms also reported easing price pressures as input price inflation slows to a 27-month low, although the rate remains historically high. Higher prices were mainly from high costs of raw material, fuel and labour, coupled with sustained weakness in the exchange rate.
