Japan Manufacturing Growth at 6-Month Low, Confirmed

The S&P Global Japan Manufacturing PMI was confirmed at 54.1 in September 2026, matching the preliminary estimate and easing from 54.9 in the previous month. It was the softest expansion in the manufacturing sector since March, as firms recorded slower increases in output and new orders. Output growth eased to a three-month low, while sales growth was at its weakest in four months. The slowdown came despite a further marked increase in foreign sales, although the rate of growth eased from August's eight-and-a-half-year high. Meanwhile, delivery times lengthened further amid reports of supplier shortages, while purchasing rose slightly and inventories of inputs increased for the first time in over two years. Employment continued to increase, with job creation remaining close to August's multi-year record. On the price front, input cost inflation eased to a six-month low, while output prices continued to rise. Finally, sentiment was little changed.

The S&P Global Japan Manufacturing PMI declined to 54.1 in September 2026 from 54.9 in the previous month, below market expectations of 55.0, marking the ninth consecutive month of expansion in factory activity, preliminary estimates showed. It was the softest expansion in the manufacturing sector since March, as firms recorded softer increases in output and new orders. Output growth eased to a three-month low, as firms recorded sales growth at its weakest in four months. The slowdown came despite a further marked increase in foreign sales, with the rate of growth unchanged from August's eight-and-a-half-year high. Meanwhile, delivery times lengthened further amid reports of supplier shortages, while purchasing activity eased, inventories of inputs rose slightly, and employment continued to increase. On the price front, input and output prices rose, driven by higher energy and raw material prices, as well as a weak yen. Lastly, sentiment improved due to hopes of continued demand.

The S&P Global Japan Manufacturing PMI was revised lower to 54.9 in August 2026 from the preliminary estimate of 55.1, after a final reading of 54.5 in the previous month, marking the eighth consecutive month of expansion in factory activity. Still, it was the strongest growth in the manufacturing sector since April and the second-steepest since January 2022, as firms recorded the fastest increase in new export business since January 2018. Meanwhile, employment rose solidly at the fastest pace since February 2028. Purchasing activity rose to the greatest extent since April 2022, while suppliers' delivery times further lengthened, partly due to disruptions stemming from the war in the Middle East. On the price front, input prices rose, driven by higher raw material and oil prices, as well as a weak yen. As a result, output prices continued to rise sharply. Finally, business sentiment improved to a six-month high, supported by expectations of higher sales.