Japan’s factory activity grows at fastest pace in nearly four years

TOKYO, Nov. 24 (BNA): Japanese factory activity grew at the fastest pace in nearly four years in November, as production accelerated after the easing of COVID-19 restrictions, defying pressures from the biggest jump in input prices in 13 years.

The pace of activity in the service sector also accelerated, as it expanded at the fastest pace in more than two years with the stability of economic conditions after the sharp decline in cases of coronavirus infection and deaths caused by high vaccination rates.

Japan’s au Jibun Bank Flash Manufacturing Purchasing Managers’ Index rose to a seasonally adjusted 54.2, its fastest expansion since January 2018.

The reading, which was lifted by the recovery in total production and new orders, compared to a final 53.2 in the previous month.

“Activity in Japanese private sector firms rose for the second month in a row in November,” said Osama Bhatti, an economist at IHS Markit that compiles the survey, according to Reuters.

Manufacturers’ optimism for the coming year has eased slightly from the previous month, according to the survey, which also showed that companies in various sectors are facing increasing price pressures.

“Private sector input prices rose at the fastest pace in more than 13 years, as companies attributed the rise to rising costs of raw materials, freight and staff amid shortages and deteriorating performance of suppliers,” Bhatti said.

The au Jibun Bank Flash Services PMI improved to a seasonally adjusted 52.1 from the final 50.7 the previous month, keeping it firmer in expansion territory.

The reading marked the fastest pace of growth since September 2019, right before the sales tax hike on consumer confidence.

The au Jibun Bank Flash Japanese Composite Purchasing Managers’ Index, which is calculated using both manufacturing and services, rose to 52.5 from the final 50.7 in October.

HF