Investing.com – Japan’s manufacturing activity contracted more than expected in January, marking the seventh straight month of contraction, preliminary purchasing managers’ index data showed on Friday, while activity in the services sector rose.
(PMI) fell to 48.8 in January from 49.6 in December, below forecasts of 49.7.
A reading below 50 indicates a contraction, with the manufacturing PMI now contracting for the seventh month in a row.
The decline showed that Japan’s manufacturing business conditions worsened to the greatest extent in ten months.
Production levels fell modestly, at the steepest rate since last April, while the inflow of new orders fell the fastest in six months, the data showed.
“New manufacturing orders fell at their most pronounced rate since last July. At the same time, the level of backlogs decreased for the second consecutive month as both the manufacturing and services sectors saw a reduction in backlogs, suggesting that the current increase in activity is at least partially driven by the completion of existing orders,” said Usamah Bhatti, an economist at S&P Global Market Intelligence, which compiled the research.
Meanwhile, it rose sharply to 52.7 in January from 50.9 in the previous month.
“Supporting the growth of (service) activities was a steeper increase in new business,” the research states.
As a result, Japanese service providers raised employment levels, despite confidence levels remaining broadly similar to late last year, according to the survey.
Japan’s Jibun Bank composite PMI, which measures manufacturing and services PMI, rose to 51.1 in January from 50.5 in the previous month.
