Manufacturing continues to decline, services stagnate

Japan's manufacturing activity shrank at its fastest pace in a year in March 2025, while the services sector also lost momentum.

Japan's manufacturing activity shrank at its fastest pace in a year in March as output and new orders fell, sending a worrying signal to the economy, a private sector survey showed on March 24.

The services sector, traditionally a bright spot in Japan's economy, also lost momentum, with business activity shrinking for the first time in five months.

The purchasing managers' index (PMI) has remained below the 50.0 mark that separates growth from contraction for nine consecutive months.

Japan's manufacturing activity shrank at its fastest pace in a year in March 2025. Illustrative photo

Overall business outlook fell to its lowest level since August 2020, with many businesses expressing concerns about rising costs, labor shortages and uncertainty in the global trade environment.

"Strong inflationary pressures, coupled with concerns about labor shortages, an aging population, sluggish consumer spending and growing uncertainty about international trade have dampened the optimistic outlook," said Annabel Fiddes, chief economist at S&P Global Market Intelligence.

In the manufacturing sector, sub-indexes for output and new orders both fell in March, prompting businesses to cut back on raw material purchases and reduce inventories.

Meanwhile, companies have had to increase hiring for the fourth consecutive month to cope with labor shortages.

Inflationary pressures remain high, with input and output price indices continuing their upward trend.

“Cost pressures remained high in March, with input costs rising sharply across both the manufacturing and services sectors, leading to significant increases in selling prices,” said Ms Fiddes.

Amid sluggish consumer spending, the services sector PMI of online bank au Jibun Bank fell to 49.5 in March from 53.7 in February, marking the first decline since October last year.

Japan's composite PMI, which combines both manufacturing and services activity, also fell to 48.5 from 52.0 in February, marking the first decline in five months.

Source: https://congthuong.vn/nhat-ban-san-xuat-tiep-tuc-suy-giam-dich-vu-chung-lai-379699.html