Key facts
- The S&P Global Japan Manufacturing PMI eased to 53.3 in October from 54.1 in September; 50 separates growth from contraction.
- Output rose for a 10th straight month in October, the softest pace since March, on semiconductor demand.
- New orders rose for a 10th consecutive month in October, the softest pace in seven months, on AI-related demand.
- Export order growth was the weakest since March, with respondents citing demand from Asia including China, North America, Africa and the Middle East.
- Input price inflation accelerated in October while output charge inflation eased to a six-month low.
- Stocks of purchases increased at the fastest rate in almost four years as firms sought to guard against further price rises.
Japan's manufacturing sector expanded at its slowest pace in seven months in October, with the S&P Global Japan Manufacturing Purchasing Managers' Index easing to 53.3 from 54.1 in September, a survey by S&P Global showed. A reading above 50 separates growth from contraction.
Output rose for a 10th straight month, supported by greater order volumes and stronger demand for semiconductors, though the pace was the softest since March. New orders also increased for a 10th consecutive month as firms cited more favorable market conditions and AI-related demand, but the pace of increase was the softest in seven months.
"The Japanese manufacturing sector has been unable to sustain the rates of growth in output and new orders we saw earlier in the year, but we are still looking at a decent pace of expansion by historical standards at the start of the fourth quarter," said Phil Smith, Economics Associate Director at S&P Global Market Intelligence.
Overseas demand remained supportive, but export order growth was the weakest since March. Survey respondents cited stronger demand from Asian markets, including China, North America, Africa and the Middle East.
Employment growth held steady and stayed close to the fastest seen in the past eight-and-a-half years. The backlog of work accelerated, with some firms also reporting input delivery delays.
Input price inflation accelerated in October, while output charge inflation eased to a six-month low. Stocks of purchases increased at the fastest rate in almost four years as firms sought to guard against further price rises.
Manufacturers' optimism about the year ahead edged up to an eight-month high, with firms citing new product launches, the AI boom and new client introductions as reasons for confidence.