Tokyo, Sept. 26 (BNA): Japan’s factory activity growth hit a 20-month low in September, as companies struggled with the global slowdown and pressure from higher energy and raw materials prices exacerbated by a weak yen.
Japan’s au Jibun Bank Flash Manufacturing Purchasing Managers’ Index (PMI) fell to a seasonally adjusted 51.0 in September from the final 51.5 the previous month, Reuters reported.
The headline figure represents the slowest expansion since January 2021, although it remains above the 50 mark that separates contraction from expansion.
It was pulled due to faltering production and total new orders, both of which contracted for the third month in a row. New orders shrank at the fastest rate in two years.
“Overall growth remains subdued as inflationary pressures and deteriorating global economic growth weigh on activity in the manufacturing and services sectors,” said Joe Hayes, chief economist at S&P Global Market Intelligence, which compiles the survey.
Optimism about conditions for the next year declined in September, hitting a five-month low.
“The notable weakness we’ve seen … year-to-date in the yen continues to drive price pressures, as companies struggle to pass the higher cost burdens onto customers fully,” Hayes said.
The survey also showed that the au Jibun Bank Flash Services PMI returned to expansion, coming in with a seasonally adjusted 51.9 in September from a final 49.5 in August.
The au Jibun Bank Flash Japanese Composite PMI, which was estimated using both manufacturing and services, also showed a return to growth, rising to 50.9 from 49.4 the previous month final.
MI