Nikkei/Markit Manufacturing PMI for May 2019

The 'final' outcome is

  • preliminary for May was 49.6
  • previous (April) was 50.2

Lowlights:

  • Domestic and external demand conditions deteriorate
  • Firms slow the rate of hiring
  • production cutbacks
  • Output expectations turn negative for first time since November 2012

Joe Hayes, Economist at IHS Markit, which compiles the survey, said:

  • "There were no signs a let-up in the recent manufacturing downturn during May, as output and new orders both slipped for fifth successive months.
  • Weak demand from Japan's key trade partner, China, as well as signs of an increasingly sluggish domestic economy, have impacted sales volumes.
  • Sub-sector data also indicated the area where manufacturing softness had hit hardest, with investment goods producers leading the decline in order books. Given the importance of capital goods to Japan's foreign trade, it would suggest further difficulties lie ahead for Japanese exporters.
  • With the upcoming sales tax hike and upper house elections in July, there lies ahead potential banana skins for Japanese firms to avoid. Re-escalated trade tensions between China and the US merely add to existing concerns for manufacturers. Subsequently, businesses cast a downbeat assessment for the year ahead for the first time in six-and-a-half years."

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South Korea's manufacturing MPI out at the same time, came in at 48.4 from 50.2 in April:

  • new orders 47.1 (from 49.5)
  • new export orders contracted for the 10the month in a row (longest decline since 2015)