TOKYO -- Japan’s manufacturing sector continued to contract in March although the pace of deterioration eased from February, according to a survey.
The Nikkei Japan Manufacturing Purchasing Managers’ Index, or PMI, rose from February’s 48.9 to recorded 49.2 in March, remaining below the 50-point line separating expansion from contraction.
The reading rounded off the worst quarterly performance since since the second quarter of 2016, signaling the challenges ahead for the Japanese economy. New orders from both domestic and overseas clients fell, with panelists noting weaker sales to China and Taiwan. Production volume was cut, and outlook remained subdued.
“The likelihood of the negative trend in output being stymied any time soon appears slim, with demand for goods from both domestic and international sources waning further,” said Joe Hayes, Economist at IHS Markit, which compiles the survey.
“For the Japanese economy to keep its head above water, the service sector will need to pick up any manufacturing slack,” he added.
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