Japanese manufacturing activity expanded in May at the same pace as the previous month, but there were signs that a growth spurt since late last year could be losing momentum as manufacturers make fewer consumer goods.
The Markit/JMMA Japan Manufacturing Purchasing managers Index (PMI) stood at a seasonally adjusted 50.7 in May, unchanged from the previous month.
The index remained above the 50 threshold that separates contraction from expansion for the sixth consecutive month, but output, domestic new orders and export orders all slowed.
“Japan’s current manufacturing sector expansion lost momentum in May, with both output and new business rising at only marginal rates,” said Alex Hamilton, an economist at Markit.
“In line with the trend observed in 2012 so far, output growth relied heavily on producers of investment goods, as manufacturers of both consumer and intermediate goods noted contractions.”
The index for new export orders, a leading indicator of Japanese exports, fell to 48.2 from 48.5 in the previous month, showing the second consecutive month of contraction.
The output component of the PMI index fell to 50.8 from 51.9 in April, marking the slowest expansion in five months.