The manufacturing sector in Japan turned back to expansion in May, according to Thursday’s preliminary survey from Markit Economics – which showed a PMI score of 50.9.
That beat forecasts for a score of 50.3, and it was up from 49.9 in April. It also moves back above the boom-or-bust line of 50 that separates expansion from contraction.
“Reflective of an overall improvement in operating conditions at Japanese manufacturers was a return to growth of both production and new orders in May. Moreover, the rates of expansion were faster than their respective long-term averages,” said Markit economist Amy Brownbill.
Among the individual components of the survey, the output index jumped to 51.7 from 49.3 in April. New orders and quantity of purchases also moved to expansion from contraction.
New export orders and employment expanded at a faster rate, while input prices expanded at a slower rate.
Stocks of purchases and stocks of finished goods slipped into contraction from expansion, while backlogs of work contracted at a faster rate.
Supplier delivery times continued to lengthen.
“Subsequently, employment rose at the quickest rate since December last year, while buying activity increased for the third time this year so far. Meanwhile, input prices increased at the weakest rate in the current 29-month sequence of inflation, while charges stabilized, following a three-month period of decline,” Brownbill said.
The material has been provided by InstaForex Company – www.instaforex.com