TOKYO (Reuters) – Activity at Japanese factories grew at the slowest pace in eight months in September as output and orders contracted, while that of the service sector remained down, underlining the impact prolonged period of the coronavirus pandemic.
The Jibun Bank Flash Japan Manufacturing Purchasing Managers Index (PMI) slipped to seasonally adjusted 51.2 in September from 52.7 the month before, marking the slowest growth since January.
The plant’s business faced headwinds due to parts supply disruptions due to the rapid spread of the highly contagious Delta variant as well as a global shortage of semiconductor chips.
Data for September showed that Japanese manufacturers’ production fell at the fastest rate in a year, while new global orders contracted at the fastest rate in 10 months.
The flash services PMI index at Jibun Bank remained in contraction, although it fell to seasonally adjusted 47.4 from the previous month’s final of 42.9, which was its lowest since the deepest of the COVID-19 crisis in Japan in May 2020.
The Japanese composite PMI index at Jibun Bank, which is calculated using both manufacturing and services, was in contraction for a fifth consecutive month, although it rose to 47.7 from 45.5 in August .
âThe Flash PMI data indicated that activity in Japanese private sector companies was further reduced in September,â said Usamah Bhatti, an economist at IHS Markit, who compiled the survey.
“The pace of the decline was slower than that seen in August, as the largest service sector experienced a significant slowdown in the rate of contraction.”
Manufacturers’ input prices have increased at the fastest rate since September 2008, according to the survey.
“Input prices in the private sector have increased at the fastest rate in 13 years, with companies attributing the rise to higher costs for raw materials, freight and personnel amidst supply shortages,” said Bhatti.
(Reporting by Daniel Leussink; Editing by Sam Holmes)
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