Daily Management Review

Flash PMI Shows Factory Activity Growth Of Japan In November Fastest In Almost 4 Years


Flash PMI Shows Factory Activity Growth Of Japan In November Fastest In Almost 4 Years
With the relaxation of the restrictions imposed by authorities to prevent the spread of Covid-19, there was an acceleration of output which pushed the pace of growth of factory activity in Japan in the month of November was the fastest in almost four years. That was despite a surge in input costs for manufacturers which were the highest in the last 13 years. 
There was also a pickup in the pace of growth in activities in the services sector as well and the pace of expansion being the highest in more than two years because of stabilization in the country's economic activities following a significant fall in the number of Covid-19 infections and related deaths because of a surge in the rate of vaccination. ,
In November, the au Jibun Bank Flash Japan Manufacturing Purchasing Managers' Index (PMI) increased to a seasonally adjusted 54.2which was the fastest pace of growth since January 2018.
The latest rise in the reading was driven by growth in overall output and new orders while the final reading for the previous month was at 53.2.
"Activity at Japanese private sector businesses rose for the second month running in November," said Usamah Bhatti, an economist at IHS Markit, which compiles the survey.
However, the survey showed that there was a slight fall in optimism in November among manufacturers of the country for the year ahead compared to the previous month which reflected the pressure that companies across sectors felt because of the surge in input costs. 
"Input prices across the private sector rose at the fastest pace for over 13 years with businesses attributing the rise to higher raw material, freight and staff costs amid shortages and deteriorating supplier performance," Bhatti said.
Compared to its final reading in the previous month at 50.7, the au Jibun Bank Flash Services PMI Index surged slightly to a seasonally adjusted 52.1 from which put the reading firmly in the expansion territory.
That growth in the reading was the fastest for it since September of 2019 which was just prior to an increase in sales tax which significantly hit the confidence of consumers.
The au Jibun Bank Flash Japan Composite PMI, which is calculated by using both manufacturing and services, rose to 52.5 from October's final of 50.7