Factory Activity in Japan is Getting Worse. Factory activity in Japan is increasingly in poor condition and service sector growth will slow down in February 2024. Moreover, the Japanese economy has just entered the brink of recession.
The survey conducted on Thursday revealed that business conditions are worsening at a time when economic activity is struggling to emerge from the recession zone.
The Purchasing Managers’ Index (PMI) or known as the Japanese Jibun Bank flash manufacturing purchasing managers’ index experienced a decline, originally from 48.0 in January to 47.2 in February 2024. The index value is still below the threshold that has been set at 50.0 which limits growth from the contraction that occurred for nine consecutive months.
The survey shows that among other sub-indices, production in manufacturing shrank the fastest in a year due to a sharp decline in new orders. Meanwhile, job opportunities are increasingly minimal due to decreased purchasing activities and reduced capacity constraints.
The PMI au Jibun Bank Japan’s flash service also experienced a decline, from 53.1 in January 2024 to 52.5 in February 2024. The index value is in a safe position from the value that has been set at 50 since September 2022.
The new business subindex saw the growth rate reach its highest point since August 2023. Japan’s flash au Jibun Bank composite PMI, a combination of activity in the manufacturing and services sectors, decreased in February to 50.3 from 51.5 in January.
According to a Tankan survey published Wednesday, business enthusiasm for manufacturers in Japan declined further in February, with pessimists outnumbering optimists for the first time in 10 months, adding to concerns about a continued economic downturn.
Factory Activity in Japan is Getting Worse. The Japanese economy unexpectedly entered the recession zone, in the fourth quarter of 2023. Japan has also lost its position as the third largest economy, being overtaken by Germany.
