Japan’s PMI Manufacturing was finalized at 51.6 in March, down from February’s 45-month high of 53.0, signaling moderation in growth momentum. Even so, the reading still marked the second-strongest performance since July 2022, with Q1 overall delivering the best quarterly showing since Q2 2022.
S&P Global Market Intelligence’s Annabel Fiddes noted that the slowdown coincided with escalation of the Middle East conflict, which survey respondents linked directly to rising cost pressures. Input prices increased at the fastest pace in over a year-and-a-half, driven largely by higher energy costs. Firms responded by raising output prices “at a quicker pace as they sought to protect their margins”.
“While the immediate impact of the war is already feeding through directly to price indicators, it will be important to monitor the PMI data in the coming months to see whether cost and supply chain pressures continue to intensify, and to assess how resilient global demand conditions are,” Fiddles added.
