Japanese Factory Activity Declined For The 18th Consecutive Month

Japanese factory activities declined for the eighteenth consecutive month in October, an unprecedented period due to weak production, new projects, and employment, but export orders grew for the first time in two years, in an encouraging indicator of the economy ravaged by the coronavirus pandemic.

The world’s third-largest economy is struggling to regain momentum after suffering its worst post-World War Two downturn in the second quarter of the year, as weak business and household spending threaten to derail any recovery.

The final reading of the Manufacturing PMI rose to 48.7 in October from 47.7 the previous month, remaining below the 50 level that separates growth from contraction for the 18th consecutive month.

But the final number exceeds an initial reading of 48 and indicates that manufacturing activity contracted at the slowest pace since January, when the health crisis began affecting the global economy.

The PMI survey showed that production, new orders and work in progress contracted again, albeit at a more moderate pace, while the deterioration of employment conditions accelerated for the first time in four months.

Export orders recorded growth for the first time in nearly two years, thanks mainly to improved demand across Asia and the Pacific.