Japan’s factory activity expanded at its fastest pace in just over four years in February, signalling strengthening momentum in the industrial sector alongside resilient demand at home and abroad, a private survey showed on Friday.
The S&P Global flash Japan Manufacturing Purchasing Managers' Index (PMI) rose to 52.8 in February from 51.5 in January, marking its highest since early 2022 and remaining above the 50 threshold that separates growth from contraction.
The manufacturing output sub-index climbed to 53.9 from 51.6, pointing to the sharpest rise in production in more than four years, according to data compiled by S&P Global.
Services activity also stayed robust, with the flash services PMI edging up to 53.8 from 53.7, while the composite PMI covering both sectors rose to 53.8 from 53.1 -- the strongest pace of private-sector expansion since May 2023.
Survey compiler S&P Global said stronger sales and a rebound in export demand, particularly for manufactured goods, drove the improvement. New orders across the private sector increased at the fastest rate since May 2023, with manufacturers recording their steepest rise in sales since early 2022.
Employment continued to grow, led by factories where hiring rose at the quickest pace in just over four years, although capacity pressures intensified as backlogs accumulated at a record rate.
Firms also reported slightly faster increases in input costs and selling prices, while business optimism climbed to a 15-month high.
Source: Investing