In October, Japan’s private sector entered contraction for the first time in four months, as indicated by the Purchasing Managers’ survey conducted by S&P Global on Thursday.
The au Jibun Bank flash composite output index registered 49.4, a decline from 52.0 in the previous month, with any score below 50 signaling contraction.
Both the manufacturing and services sectors experienced downturns in October, driven by a lackluster economy and weak new order inflows.
Highlighting a notable decline in manufacturing conditions, the flash factory Purchasing Managers’ Index fell to 49.0 from 49.7 in September.
The flash services PMI decreased to 49.3, down from 53.1 in September, marking the steepest drop since February 2022.
After experiencing three months of growth, new business received by companies declined slightly in October, with domestic orders decreasing due to reduced activity and the most significant drop in orders from abroad since February 2023.
Sentiment regarding growth in business activity over the next twelve months weakened, reaching its lowest level since August 2020. Respondents pointed to the prevailing economic challenges and persistent high prices as factors affecting their outlook.
Firms noted a heightened rate of inflation in output charges for the second consecutive month, significantly surpassing the series average.
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