ANN/THE STRAITS TIMES – Japan’s manufacturing activity shrank at the fastest pace in more than two years in December on soft demand and persistent cost pressures, a corporate survey showed yesterday.
While service sector output rebounded on tourism reopening, weak factory activity has blurred Japan’s recovery prospects as companies enter labour talks, in which wage hikes are deemed essential for post-pandemic economic growth.
The au Jibun Bank Flash Japan Manufacturing Purchasing Managers’ Index (PMI) was down to a seasonally adjusted 48.8 in December from a final reading of 49 in the previous month.
The index was below the 50-mark that separates contraction from expansion for a second month and marked the sharpest decline since October 2020’s 48.7.
“Manufacturing firms continued to struggle in the face of subdued demand conditions and severe inflationary pressures,” said economist Laura Denman at S&P Global Market Intelligence, which compiles the survey.