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Japan private sector expansion quickens in July PMI survey
The composite PMI output index rose to 53.1, while manufacturing output climbed to 56.1 and services business activity cooled to 51.9.
Japan’s private sector activity strengthened in July, according to a S&P Global Flash Composite PMI survey, with the PMI Output Index edging up from 52.8 to 53.1.
The data pointed to a more uneven recovery, as manufacturing outperformed services. The Manufacturing PMI slipped slightly to 54.7 from 54.8, but manufacturing output accelerated sharply, with the Output Index rising from 54.3 to 56.1, while services business activity cooled as the Services PMI Business Activity Index fell from 52.2 to 51.9.
The survey said manufacturing demand was supported by semiconductor and artificial intelligence industries, while the services sector lost some momentum. It also cited ongoing Middle East geopolitical tensions affecting business conditions, including firms building inventories of finished goods and raw materials to guard against supply chain disruptions and higher input costs.
Despite the faster activity pace, firms reported a more cautious outlook and weakened business confidence, especially in services. The survey added that cost inflation eased slightly from June and that companies, particularly in services, were able to pass higher costs through to customers through faster increases in selling prices.