The sub-index gauging backlogs of work was at the lowest since September 2020, underscoring the frail customer demand. Input price inflation slumped to its slowest pace in 18 months, while the rate of output price inflation rose for the first time in four months as more companies successfully passed on elevated costs to clients. On the brighter side, supplier delivery delays were the least prevalent in two years, the survey showed. Recent data showed Japan's economy averted recession but rebounded much less than expected in the fourth quarter last year as business investment slumped. The Bank of Japan remains an outlier in the current global monetary tightening phase, committing to maintaining ultra-low rates to shore up its COVID-ravaged economy. (Reporting by Kantaro Komiya Editing by Shri Navaratnam)
TOKYO, March 1 (Reuters) - Japan's factory activity
shrank in February at the fastest pace in over two years, a
private survey showed, highlighting companies' struggles amid a
global economic slowdown, raw material inflation and
policymakers' calls for higher wages.
The final au Jibun Bank Japan Manufacturing Purchasing
Managers' Index released on Wednesday fell to 47.7 in February
from January's 48.9. Although higher than the flash reading, it
marked the fastest decline since September 2020.
"Both new orders and production levels, which make up 55% of
the headline PMI figure, fell at the fastest pace since July
2020 as weak domestic demand and a global economic slowdown
hindered sales and output volumes," said economist Usamah Bhatti
at S&P Global Market Intelligence, which compiles the survey.
Manufacturing output and new orders contracted for an eighth
consecutive month and at the fastest rates in 31 months, the
survey showed.
The final PMI reading comes a day after government data
showed Japanese factories slashed output in January at the
fastest pace in eight months, dragged down by auto and
semiconductor sectors.
The downturn in factory activity is likely to be sustained
over the near term, Bhatti said, "as the absence of new orders
amid dampened client confidence lifted capacity pressure on
manufacturers further."
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