2023.09.2206:56:00UTC+00Japan Private Sector Activity Expands Least In 7 Months

Japan's private sector activity showed a loss of growth momentum in September, with the weakest expansion in seven months, largely affected by a further downturn in the manufacturing sector, a closely watched survey showed on Tuesday.

The flash au Jibun Bank composite output index dropped to 51.8 in September from 52.6 in August, data published by S&P Global revealed. Nonetheless, a score above 50.0 indicates expansion in the sector.

The flash manufacturing purchasing managers' index declined to 48.6 from 48.9 in the previous month. Further, this was the steepest fall in seven months.

However, the service sector remained in growth territory in September. The flash au Jibun Bank services PMI stood at 53.3 in September versus 54.3 in the prior month.

New orders received by the Japanese private sector increased at the slowest pace since February. Forward-looking indicators from the survey suggest the potential for softening demand and activity over the coming months.

Amid easing capacity pressures, employment levels decreased for the first time this year and at the quickest since August 2020, due to the non-replacement of voluntary leavers, partly as part of cost-saving efforts amid elevated cost burdens.

Price pressures faced by Japanese manufacturers remained elevated during September, as the rate of input price inflation accelerated for the second successive month to hit a four-month high.