Japan’s manufacturing PMI in July
According to a Markit Economics report, Japan’s manufacturing PMI (EWJ) (DXJ) stood at 52.1 in July 2017 as compared to 52.4 in June 2017. The reading is slightly below the preliminary market estimate of 52.2 and was the lowest figure since November 2016.
Manufacturing activity has fallen gradually in the last few months. The fall in Japan’s manufacturing PMI is mainly due to the fall in domestic demand. However, the overseas (ACWI) (VTI) demand increased in July.
Let’s look at some of the key factors in the manufacturing PMI:
- Production volume and new order growth rose at a weaker pace in July 2017.
- New export orders improved at a stronger rate in July as compared to June 2017.
- Employment in the manufacturing sector also fell in July 2017.
The weaker manufacturing PMI indicates that consumer demand fell slightly in July. However, overall consumer spending rose, which could help companies improve their productivity, leading to higher employment, higher business activity, and wage growth.
In the next part of this series, we’ll analyze US GDP in 2Q17.