TOKYO, Oct 1 (Reuters) – Japan’s manufacturing sector expanded at its weakest pace in six months in September as output and new order growth slowed, a business survey showed on Thursday.
• The S&P Global Japan Manufacturing Purchasing Managers’ Index (PMI) eased to 54.1 in September from 54.9 in August, a survey by S&P Global showed, matching a flash reading.
• Although it slowed down from the previous month, it marked the ninth consecutive month of expansion. A reading above 50.0 indicates expansion, while below that level signals contraction.
• “Firms signalled slower increases in output and new orders, as some companies mentioned that clients were adjusting inventories as an earlier period of stock accumulation began to unwind,” said Annabel Fiddes, economics associate director at S&P Global Market Intelligence.
• While production rose strongly, its pace eased to a three-month low. Total new orders similarly increased at a slower rate, with the expansion the weakest in four months after August’s multi-year record.
• Overseas demand remained firmer. New export orders rose for a ninth straight month and the pace of growth was the second-sharpest since January 2018, supported by stronger demand across Asian economies and improved sales to the US.
• Employment increased for a 22nd consecutive month and the pace stayed close to August’s recent high, making it the second-fastest since April 2018. Higher staffing and slower sales growth helped reduce backlog growth to a modest six-month low.
• Cost pressures remained elevated even as they eased. Input cost inflation slowed to a six-month low, while firms continued to raise selling prices at one of the sharpest rates seen since late 2022.
• Manufacturers remained optimistic that output would rise over the next 12 months, with sentiment little changed from August and above the long-run average. Firms cited demand related to semiconductors and AI-related technology, though the survey flagged supply disruption, component shortages and rising costs as risks.
(Reporting by Satoshi Sugiyama; Editing by Jacqueline Wong)
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