Japan’s manufacturing index on a 3 month high, PMI
The Dollar Business Bureau
Japan has secured new orders, prompting a 3 month manufacturing high in May supported by stronger increases in output, a survey reported.
This is a clear sign that its economy is gaining in momentum in the second quarter of 2017.
Japan Manufacturing Purchasing Managers Index rose to 53.1 in May stronger than the readings 52.0 and 52.7 recorded in April. This was the highest level recorded since February the survey said.
Improvement in operating conditions has been linked to accelerated rises in both manufacturing output and new orders.
This has prompted Japanese companies to increase hiring since production increased for the tenth consecutive month. Companies are reported to have said, that growth was supported by a demand both domestically as well as abroad. There has been a steady increase in new export orders which was marginally down in April. The fastest increase in output and new orders was seen in the capital goods sector which also saw an increase in employment which meant that jobs were being added in line with the rising production demands.
Purchasing activity also increased, placing pressure on vendors amid reports of stock shortages. Input costs also continued to rise, though to a lesser degree, while output charges increased marginally. Higher output meant that purchasing activity continued to rise which helped boost the input inventories. The rate of expansion was the highest in 16 months which has prompted many companies to prepare for higher orders in the coming months. May’s increase forecast showed that manufacturers reposed faith in growth while demand and preparations for the 2020 Olympics Games is expected to further give a fillip to the manufacturing activity.