Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Japan's May factory activity growth slows as China lockdowns weigh -PMI

Published 05/31/2022, 11:07 PM
Updated 05/31/2022, 11:13 PM
© Reuters. FILE PHOTO: Smoke billows from chimneys at an industrial district near Tokyo February 28, 2011. REUTERS/Kim Kyung-Hoon

© Reuters. FILE PHOTO: Smoke billows from chimneys at an industrial district near Tokyo February 28, 2011. REUTERS/Kim Kyung-Hoon

TOKYO (Reuters) - Japan's manufacturing activity grew at the weakest pace in three months in May, as China's heavy-handed coronavirus curbs aggravated supply disruptions and raised risks for the economic outlook.

Manufacturers reported a renewed rise in input costs due to higher prices of commodities and materials, including fuel and semiconductors, as the fallout from China's lockdowns and the Ukraine conflict pressured the economy.

The final au Jibun Bank Japan Manufacturing purchasing managers' index (PMI) released on Wednesday fell to a seasonally adjusted 53.3 in May from the prior month's 53.5 final, the slowest pace since February. The 50-mark separates contraction from expansion.

"Both output and new orders rose at softer rates, with the latter rising at the weakest pace for eight months amid sustained supply chain disruption and raw material price hikes," said Usamah Bhatti, Economist at S&P Global (NYSE:SPGI) Market Intelligence.

"Disruptions were exacerbated by renewed lockdown restrictions across China, and contributed to a further sharp lengthening of suppliers' delivery times."

The survey showed new overseas orders shrank at the fastest pace since July 2020, while manufacturers' input prices jumped at the fastest pace since August 2008.

© Reuters. FILE PHOTO: Smoke billows from chimneys at an industrial district near Tokyo February 28, 2011. REUTERS/Kim Kyung-Hoon

Manufacturers became slightly more optimistic about output conditions for the next 12 months on hopes that the coronavirus pandemic and the Ukraine conflict will end and allow supply chains to normalise, the survey showed.

"This is in line with an estimated 2.9% increase in industrial production in 2022," said Bhatti.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.