Jibun / S&P Global Manufacturing PMI from Japan for February 2023. The flash reading for this is here:
The report for this highlights:
- Sharpest reductions in output and new orders since July 2020
- Backlogs of work decrease at quickest pace for 29 months
- Slowest rise in input prices for a year-and-a-half
While the final number is up on the flash its still in deep contraction.
More details commentary from the report:
- “Latest data pointed to continually deteriorating activity in the Japanese manufacturing sector midway through the first quarter of 2023. Both new orders and production levels, which make up 55% of the headline PMI figure, fell at the fastest pace since July 2020 as weak domestic demand and a global economic slowdown hindered sales and output volumes.
- "Moreover, the dip is likely to be sustained in the near-term as the absence of new orders amid dampened client confidence lifted capacity pressure on manufacturers further and led to the sharpest reduction in outstanding business in nearly two-and-a-half years.
- "A benefit that has come from softer demand conditions is that pressure on supply chains has been given the opportunity to ease. The instance of supplier delivery delays was at the lowest level since February 2021 and well above the troughs seen throughout last year. While this helped to ease inflationary pressures (index at 18-month low), input prices remained historically elevated, with many panel members citing high raw material prices as the key driver behind sustained increases in average operating expenses."
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As I said before, incoming Bank of Japan governor Ueda is going to move very cautiously indeed. The economy is not a tower of strength right now.
Kuroda and Ueda (seated)
jpy
