Japanese manufacturing activity co
ntracted again in November and export orders were the weakest in five mo
nths as external demand from places like China slowed. The bank of Jibun's seaso
nally adjusted final purchasing managers' index for Japan's manufacturing sector came in at 48.9 in November, slightly higher than last week's preliminary reading of 48.6, compared with 48.4 in October. Despite the slower pace of decline, the index remained below the 50 level that separates expansion from co
ntraction for the seventh co
nth and the lo
ntraction since the nine-mo
ntraction between June 2012 and February 2013. The PMI survey showed a deepening rift in the Japanese economy, with key indicators such as industrial production and total new orders showing a hit from sluggish domestic and external demand.
"Japan's manufacturing sector remains firmly stuck in contraction, with export orders falling at their fastest pace since mid-year amid weak demand in China, a key trade destination," said JoeHayes, analyst at IHSMarkit, which conducted the survey. A string of dismal data, including weak exports and retail sales in October, has painted a bleak economic outlook after last month's data showed growth in the third quarter was close to stalling. New export orders fell to their lowest level since June, mainly because of slowing demand in China, while undelivered orders remained weak, falling to their lowest level since late 2012. "On the sub-index side, the downturn was mainly reflected in intermediate and investment goods, with a sharp drop in input inventories, suggesting companies do not expect demand for output to rise soon," said Hayes at IHSMarkit.