Japan manufacturing PMI edges higher in April; price pressure intensifies

April’s survey of Japanese manufacturers indicated a further improvement in business conditions, as output, new orders and employment all continued to rise. Export sales strengthened amid reports of higher demand, while purchasing activity was raised to the greatest degree since the start of 2016.

Subsequent pressure on suppliers meant that delivery times lengthened markedly, exacerbated by stock shortages at vendors. Prices for inputs rose sharply and output charges were raised to the greatest degree for nearly two-and-a-half years.

The headline Japan Manufacturing Purchasing Managers’ Index (PMI) a composite single-figure indicator of manufacturing performance – edged higher to a level of 52.7 during April (from 52.4 in March). Posting above the 50.0 no-change mark for an eighth successive month, the index was at a level amongst the best seen in the past three years.

Ongoing rises in demand also served to push-up the cost of raw materials during the month. Input price inflation accelerated during April to a 28-month high, with companies noting fuel and steelrelated products as key sources of increased overall prices.

Finally, business confidence strengthened during April with nearly a third of the panel forecasting growth in output. Client demand and new orders are widely forecast to rise, with growth also set to be supported by the launch of new products.