JP: PMI Manufacturing Index

Sun Jul 02 19:30:00 CDT 2017

Actual Previous
Manufacturing - Level 52.4 53.1

The Nikkei Manufacturing PMI headline index fell to 52.4 in June, above the flash estimate of 52.0, but confirming a fall from 53.1 in May.

The survey's production index shows output by manufacturers increased again in June, but at a pace slower than that recorded in May. Respondents also reported a smaller increase in new orders, but new export orders grew at their fastest pace since February, boosted by strong demand from south-east Asia. Respondents remain confident about the twelve-month outlook for activity, with the survey's measure of employment also indicating a tenth consecutive increase in payrolls, broadly in line with official labour market data.

Respondents reported another increase in input costs and selling prices in June, with the latter matching the pace set in April, a near two-and-a-half year high.

The Purchasing Managers' Manufacturing Index (PMI) is based on monthly questionnaire surveys of selected companies which provide an advance indication of what is really happening in the private sector economy by tracking changes in variables such as output, new orders, stock levels, employment and prices across the manufacturing sectors.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.