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The manufacturing sector in Japan continued to expand in March, and at a faster pace, the latest survey from Jibun Bank showed on Thursday with a manufacturing PMI score of 53.2.
That's up from 52.7 in February and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.
Output returned to expansion territory in the latest survey period, albeit only marginally. That said, new order growth continued to slow, with the latest data pointing to the softest rise in six months. Manufacturers continued to signal severe supply chain disruption, as supplier delivery times lengthened to the greatest extent since April 2011 amid material shortages, notably for semiconductors.
This strengthened inflationary pressures further, pushing input price inflation to the highest since August 2008, with firms reporting higher energy, oil and semiconductor prices. The survey also showed that the services PMI climbed to 48.7 from 44.2 and the composite PMI improved to 49.3 from 45.8.
Positively, new business inflows returned to growth as COVID-19 restrictions were eased, albeit at a fractional pace overall. Concurrently, input price inflation quickened for the second month running to reach the highest since last December. In turn this contributed to a renewed rise in prices charged. Moreover, service providers noted the softest degree of optimism regarding the year ahead outlook for activity since January 2021.
