This is the sharpest rate of contraction in manufacturing activity since April 2011, a month after the tragic earthquake and tsunami devasted the country.
Key points from Markit;
- Output and new orders down at accelerated rates
- Near-stagnation of employment
- Purchasing costs fall to greatest extent since November 2009
From Markit economist Alex Hamilton:
Japan’s manufacturing sector downturn continued in August, according to PMI survey findings. The data provide further evidence to suggest that growth in the world’s third largest economy is faltering in the face of weakening global demand conditions. Overall new business (exports plus domestic) declined at a solid rate, while the index measuring trends in factory output fell further over the month.
There was more deflationary news on the price front, with average input costs and output charges decreasing simultaneously for a third month running. Meanwhile, a muted labour market picture was signalled by the latest survey, with employment stagnating.