Japan’s Manufacturing Sector Grows at the Fastest Pace Since February 2018
The Japanese manufacturing sector posted the fastest growth in more than three years during the month of April, buoyed by recovery in the global economy from the coronavirus crisis, even though the ongoing pandemic has impacted the business outlook going forward. The final au Jibun Bank Japan manufacturing PMI improved to a seasonally adjusted reading of 53.6 for April, coming in higher than March’s reading of 52.7 and the flash figure of 53.3.
April’s figure was the strongest reading seen since February 2018 and indicates an expansion in the manufacturing sector for the third consecutive month. The rise in manufacturing activity was driven by a sharp increase in output, orders as well as hiring activity.
Increased demand for goods saw input costs rising for the 11th consecutive month, with the inflation in input costs rising at the fastest pace in over two years. Output expectations among Japanese manufacturers came in line with the forecast, with industrial production anticipated to rise by 7.7% in 2021.
Economist at IHS Markit, Usamah Bhatti, observes that the growth forecast for the industrial production “does not fully recover the output lost to the pandemic in 2020. Moreover, further disruption to the manufacturing sector cannot be ruled out as COVID-19 restrictions are reintroduced as infections rise once again.”
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