China’s COVID-19 lockdowns have disrupted supply chains, which has had a big impact on trade-dependent economies such as Japan.
Jibun Bank’s Flash Japan Manufacturing Purchasing Managers’ Index (PMI) slipped to 52.7 in June, seasonally adjusted, from 53.3 in May, marking the weakest expansion since February , where it was also 52.7.
In April and May, the PMI manufacturing index also rose at a slower pace than the previous month.
Overall, new orders fell for the first time in nine months due to mounting pressure on already disrupted supply chains, while production increased to its slowest pace in three months, according to the survey.
New business in the services sector increased for the second month in a row, as the recovery in tourism helped to strengthen general conditions in the private sector.
“Japanese private sector business activity has increased in a solid fashion,” said Usamah Bhatti, an economist at S&P Global Market Intelligence, which compiles the survey.
General private sector sentiment saw the biggest rise since November amid the biggest expansion in services since October 2013, he added.
Jibun Bank’s flash services PMI improved to 54.2 in June, after seasonal adjustment, from 52.6 the previous month. The 50 mark separates contraction from expansion.
The composite PMI index at Jibun Bank Flash Japan, which is calculated using both manufacturing and services, rose to 53.2 from a final of 52.3 in May.
But the survey also showed that Japanese companies continued to face widespread pressure from high commodity prices.
“Prices charged for Japanese goods and services increased at an unprecedented rate for the second consecutive month, with higher raw material and labor costs being partially passed on to customers,” Bhatti added.