Japanese manufacturing activity expanded in October at a slower pace than the previous month as output and new orders growth eased in a sign final demand is moderating, a preliminary gauge of activity showed on Tuesday.
The Markit/Nikkei Japan Manufacturing flash Purchasing Managers Index (PMI) fell to a seasonally adjusted 52.5 in October from a final reading of 52.9 in September.
The index remained above the 50 threshold that separates expansion from contraction for the 14th consecutive month.
“Although still improving solidly, the Japanese manufacturing sector appeared to lose some momentum in October, as growth eased from September’s four-month high,” said Joe Hayes, Economist at IHS Markit, which compiles the survey.
“Softer expansions were seen for both output and new orders.”
The output component of the PMI index fell to preliminary a 52.6 from a final 53.2 in the previous month.
The flash index for new orders also fell to 52.4 from 53.4 in September.
The index measuring companies’ expectations for future output fell to an 11-month low of 57.5 from a final reading of 61.2 in September, which shows that business sentiment has weakened somewhat following relatively strong economic growth this year.
Japan’s economy grew for the sixth consecutive quarter in April-June this year due to a pickup in consumer spending and capital expenditure, which is the longest streak in a decade.
Recent data has shown a slight slowdown in exports and industrial output, but economists remain optimistic that a tight labor market and rising business investment will keep growth on track.
Reporting by Stanley White; Editing by Sam Holmes