Image: Reuters Berita 24 English - Even while service sector morale reached a nearly nine-year high due to the fading pandemic impact, Japa...
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| Image: Reuters |
Berita 24 English - Even while service sector morale reached a nearly nine-year high due to the fading pandemic impact, Japan's factory activity growth slowed in June as China's harsh COVID-19 controls took a toll on manufacturing demand.
Supply chains have been affected by COVID-19 lockdowns, severely harming trade-dependent economies like Japan.
The au Jibun Bank flash Japan Manufacturing purchasing managers' index (PMI) slipped to a seasonally adjusted 52.7 in June from a final 53.3 in May, marking the slowest expansion since February when it also was 52.7.
The manufacturing PMI also expanded more slowly in April and May than it had the month before.
Due to increasing strain on already disturbed supply chains, new orders overall decreased for the first time in nine months, according to the poll, while output climbed at the slowest rate in three months.
For the second consecutive month, new business increased in the services sector as an uptick in tourism improved conditions across the board in the private sector.
Usamah Bhatti, an economist at S&P Global Market Intelligence, the company that compiles the poll, stated that "activity at Japanese private sector enterprises climbed strongly."
The largest expansion in services since October 2013 coincided with the sharpest increase in overall private-sector confidence since November, according to him.
From a final score of 52.6 in May, the au Jibun Bank Flash services PMI Index increased to a seasonally adjusted 54.2 in June. Contraction and expansion are distinguished by the 50-mark.
The manufacturing and services-based au Jibun Bank Flash Japan Composite PMI increased from a final reading of 52.3 in May to 53.2.
However, the study also revealed that high raw material prices continue to exert significant pressure on Japanese businesses.
For the second consecutive month, prices charged for Japanese goods and services increased at an unprecedented rate as increasing material and employee cost burdens were largely passed on to customers, Bhatti added.
