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TOKYO : Japan’s factory activity shrank at the fastest pace in nine months in November as sluggish domestic and international demand squeezed firms’ order books, a private-sector survey showed on Friday.
The final au Jibun Bank Japan manufacturing purchasing managers’ index (PMI) was at 48.3 in November. The reading, although slightly better than flash 48.1 but below October’s reading of 48.7.
It also marked the sixth month the PMI was below the 50.0 threshold that separates growth from contraction.
Output and new orders – the two main subindexes that contribute to the headline figure – decreased at a quicker pace than in October.
Respondents “often commented on weak customer demand in both domestic and international markets,” said Usamah Bhatti of S&P Global Market Intelligence, which compiled the survey.
Overseas demand from China, Europe and other major markets was particularly weak, with the subindex for new export orders posting the 21st month of contraction.
Firms cut input purchases and backlogs of work at a quicker pace than in the previous month, while lowering employment levels for a second month by curbing the replacement of voluntary leavers, the data showed.
Meanwhile, input inflation was the slowest in four months, and output inflation hit the lowest since July 2021.
Bank of Japan data showed wholesale inflation decelerated below 1 per cent in October for the first time in over two years, highlighting easing price pressure on companies.
Manufacturers largely remained positive about their production outlook, the November PMI data showed, with improved prospects on cyclical goods.
“Firms cited hopes of a broad-based boost to domestic and international demand following new product launches, most notably in the semiconductor sector,” Bhatti said.
The PMI survey came a day after official statistics showed Japan’s industrial output rose for a second month in October thanks to robust electronic parts and car production.
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