Doing now in contraction for 6 months straight.
December Flash Production: 49.4
Services: 51.4
Composite: 50.8 … Strongest rise in private sector activity for three months
In summary from today's report:
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Japan's manufacturing sector has contracted steadily over the past three months, as indicated by the Jibun Bank/S&P Global Manufacturing Purchasing Managers' Index (PMI):
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September 2024: The PMI stood at 49.7, indicating a decline in manufacturing activity.
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October 2024: The PMI fell to 49.2, marking the biggest decline in the sector's health in three months. This decline was the result of a renewed decline in investment goods and a softer fall in intermediate goods, with consumer goods experiencing largely stagnant conditions.
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November 2024: The PMI fell further to 49.0, the lowest level since March, indicating a slight but stronger contraction. This decline was driven by sustained reductions in orders and new products, with low demand from domestic and international markets. In particular, companies reduced employment rates for the first time since February, and job backlogs fell sharply.
These numbers reflected ongoing challenges in Japan's manufacturing sector, including weak demand in key industries such as semiconductors and automobiles, as well as continued cost pressures from labor, logistics, and raw materials. Despite these challenges, manufacturers have maintained a degree of optimism about future business prospects, supported by anticipation of new product launches and a wider economic recovery .
For Japan's Services PMI over the past three months:
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September 2024: The Services PMI was at 53.1, indicating strong expansion in the services sector.
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October 2024: The index fell to 49.7, marking a contraction – the first since June. This decline was due to slower sales and a renewed decline in export orders. Business confidence also fell to a 31-month low.
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November 2024: The Services PMI rebounded to 50.5, showing a slight expansion. This improvement was driven by an increase in business and new employment, with individual business growing at the fastest rate in eight months. However, inflationary pressures persisted due to higher costs in fuel, labor and logistics.
These fluctuations highlight the sensitivity of the services sector to domestic and international demand, as well as cost pressures that affect business sentiment and activity levels.
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