Japan’s Factory Activity Falls at Fastest Pace in 19 Months

Japan’s manufacturing activity shrank in October at the fastest pace in 19 months, hit by slumping demand in the key automotive and semiconductor sectors, a private-sector survey showed, Reuters reported.

Despite reduced demand, the drop in production output was less severe than in September, as manufacturers adjusted to shortages in new work. (Photo: Global Toyota)

The S&P Global Japan Manufacturing Purchasing Managers’ Index (PMI) slipped to 48.2 in October from 48.5 in September, undershooting the flash reading of 49.3 and marking the lowest level since March 2024.

The headline index has remained below the 50.0 mark that separates growth from contraction for four consecutive months.

New orders fell at the fastest pace in 20 months, driven by constrained client budgets and weak demand, the survey found.

Export orders continued to decline for a 44th consecutive month, particularly from Asia, Europe, and the U.S., though the rate of contraction was the slowest since March.

“Demand weakness, particularly in the automotive and semiconductor sectors, weighed on the Japanese manufacturing industry,” said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.

Despite reduced demand, the drop in production output was less severe than in September, as manufacturers adjusted to shortages in new work, according to the survey.