Japan’s Manufacturing PMI Ebb Slightly but Overall Economy Remain Strong

The manufacturing activity of Japan had improved in a gradual momentum last month, as shown in the revised figures from the Monday poll. Moreover, the growth of new orders and output had moderated slightly as the general economy remained stable.

Nevertheless, the Final Markit/Nikkei Japan Manufacturing Purchasing Managers Index (PMI) had declined to 53.1 on a seasonally adjusted basis in March, the data was slightly lower than the initial forecast of 53.2 and 54.1 in February. The preliminary outlook decreased for two consecutive months, however, it was able to maintain above the 50 threshold that separates contraction from expansion for 19 months successive months.

IHS Markit Economist Joe Hayes said that the recent survey data fell for two straight months in the  Japanese manufacturing PMI, which further coincide with the survey. With this, the overall economy continued to be optimistic with a forecast of 53.1 that indicates a fairly strong momentum in the business status.

The final index for new orders came in at 53.1, which is weaker than the initial estimate of 53.2 and 54.7 in March. While new export orders remained steady from the advance projection was 52.5 but lower than February’s 54.1.

The economy of Japan grew for eight successive quarters, which is the longest continuing expansion after the 12-quarter run of growth amid the 1980s boom. There are some economists who said that the growth pace for this year could be controlled due to consumer expenditure that may decline gradually despite the strong performance of Japan’s exports, which continue to be the third largest economy in the world.