Japan's manufacturing activity expanded at its slowest pace in February as
production began to contract. This underscores the prolonged impact of
global supply chain disruptions on the world's third-largest economy.
Meanwhile, activity in the services sector also shrank at the fastest rate
since May 2020 as demand weakened after the country saw coronavirus
infections jump to a record due to the Omicron variant.
Monday (22/2), the au Jibun Bank Flash Japan Manufacturing Purchasing
Managers' Index (PMI) fell to a seasonally adjusted 52.9 from 55.4 late in
the previous month.
"Producers are signaling production cuts for the first time in five months,
although the rate of contraction is much softer than that seen in the
dominant services sector," said Usamah Bhatti, economist at IHS Markit.
Bhatti also revealed that survey results showed extended delivery times were
exacerbating material shortages, causing input prices to rise at the fastest
rate since August 2008.
"Companies continue to report that rising input prices and shortages of
materials, particularly fuels and metals continue to dampen private sector
activity," Bhatti added.
Hence, both manufacturers and service sector companies are less optimistic
about business conditions in the next 12 months.
The PMI index for au Jibun Bank Flash Services slipped to a seasonally
adjusted 42.7 from the previous month's end of 47.6. Meanwhile,
The Flash au Jibun Bank Flash Japan Composite PMI, which is calculated using
manufacturing and services, fell to 44.6 from January's final 49.9, marking
its lowest level since June 2020 at 40.8.
