Japan manufacturing activity shrinks to 47.4% in February

Japan manufacturing activity shrinks to 47.4% in February

The PMI of the Jibun Bank flash Japan manufacturing managers fell to 47.4 in February from a final 48.9 in the previous month.

The index stayed below the 50 level that separates contraction from expansion for a fourth consecutive month, and marked the largest decline since August 2020 s 47.2.

The sub-index data shows that factory output and new orders decreased for an eighth consecutive month and at a faster rate than in January.

Service sector activity grew for a period of six months with further relaxation of domestic COVID 19 countermeasures. The government said last month it would downgrade the public health classification of the coronaviruses in May.

The PMI of the Jibun Bank rose to an eight month high of 53.6 seasonally adjusted in February from the previous month's 52.3 final.

Andrew Harker, S&P Global Market Intelligence's economics director, said service providers posted a boost to demand and new business as the latest wave of the COVID 19 epidemic faded.

Service firms input costs went up at the fastest pace in eight months, while the inflation for prices they charged customers rose to a two-month high, indicating thinner profits.

In the coming months, companies will be hoping that price pressures will be lessened in order to provide some support to customer demand, said Harker.

Service operators confidence improved despite the challenges of the cost environment, with the business sentiment sub-index rising from a 10 month low.

The composite PMI of the Au Jibun Bank Flash Japan was 50.7 in February, in line with last month's final figure, as the gloomy manufacturing index was offset by a rosy service PMI.