A business survey released on Tuesday showed that manufacturing activity in Japan had dropped at the sharpest pace in 30 months in February. This is worrying data for the world’s third-largest economy, which is trying to overcome declining demand and rising cost pressures.
In February, the au Jibun Bank flash Japan manufacturing purchasing managers’ index (PMI) fell to 47.4, from January’s reading of 48.9.
The indicator declined to its lowest level since August of 2020, when it was 47.2, remaining below the 50 threshold separating contraction from expansion for the fourth consecutive month.
Export orders fell by the most since July 2020, reflecting persistently weak global demand, as shown by recent data such as slower-than-expected GDP growth in October-December and January’s record trade deficit.
A further easing of domestic Covid-19 countermeasures, on the other hand, led to six months of expansion in the service sector. The economy’s service sector expanded at a faster clip in February, with a figure of 53.6, up from January’s 52.3.
Data from the sub-index indicated that factory output and new orders fell for the eighth consecutive month, and at faster rates than in January.
