TOKYO - Japanese manufacturing activity expanded at a slightly slower pace in June due to some weakness in domestic orders but an upward revision to export orders suggests the factory sector remains on firm footing.
The final June Markit/Nikkei Japan Manufacturing Purchasing Managers’ Index (PMI) was 52.4, higher than a preliminary reading of 52.0 but still below a final 53.1 in May.
The index remained above the 50 threshold that separates expansion from contraction for the 10th consecutive month.
“Although final PMI data for June confirmed that growth slowed, the sector continues to benefit from rising global demand, especially from South East Asia which was a key source of new order wins,” said Paul Smith, senior economist at IHS Markit, which compiles the survey.
The final index for new orders, which includes both domestic and overseas orders, was 52.3. This compares to a flash reading of 51.3 and a final 53.4 in May.
The index for new export orders was revised up in June to a final 53.4 from a preliminary 52.5. In May, that index was 53.0.
The PMI survey comes after government data showed industrial production in May fell by the most since the March 2011 earthquake and inventories rose to the highest in almost a year, causing some economists to turn pessimistic on the outlook.
Reporting by Stanley White; Editing by Richard Borsuk