Published: Thu, May 03, 2018
Markets | By Josh Butler

Japan April services activity grows fastest in six months - PMI

Japan April services activity grows fastest in six months - PMI

The reports have mixed directional data, and while growth remains in the air it may be deemed to be at a less robust rate.

A third successive monthly fall in the headline PMI represents a clear turning point in growth since the start of the year and can not simply be attributed to first quarter's weather-related disruptions, Paul Smith, director at IHS Markit, said.

India's manufacturing sector activity improved marginally in April, driven by rise in new business orders amid favourable demand conditions, amid easing inflationary pressures, says a monthly survey.

Most other sub-indexes, including output and employment, also weakened, and export orders posted their lowest reading since November 2016.

Manufacturing employment rose for the forty-fourth month running in April. However, growth of new business moderated for the second straight month, reflecting weakening demand across the manufacturing sector, said a Caixin/Markit research note.

Cai Jin, Vice President of China Federation of Logistics and Purchasing (CFLP), said that the index figures for non-manufacturing industries has remained stable at 54-percent for eight consecutive months, indicating that China's domestic demand has gradually solidified as the Chinese economy becomes more service-oriented.

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A twenty-first consecutive month of rising production in the Japanese manufacturing sector was recorded in April.

The reading for April was the weakest since March 2017.

He added that "price data suggests that inflationary pressures, which stem from USA dollar strength, subsided slightly as input cost inflation softened from one month earlier and now settled below the historical average".

"There were some positives reported by construction firms in April as optimism rose to its highest level since May 2017 and an increase in workforces was reported in anticipation of a better second quarter of the year". However, output charge inflation was solid and the fastest since last September.

IHS Markit's report also noted that manufacturer's confidence in business has reached its lowest level in five months, which is anticipated to linked to Brexit and potential trade barriers. Problematically, the rate of contraction quickened the fastest in just over a year. "At the same time, IHS Markit anticipates that widening interest rate differentials will lead to a further depreciation of the Indonesian rupiah this year", Dodhia said.

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