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Japan’s economy is not happy about the Olympics

Japan’s manufacturing performance reached its slowest growth in five months in July, and has lost momentum for four months now, indicating that

The world’s third largest economy is severely hampered by the fight against epidemics

Unearthed raw data from a joint survey conducted by IHS Markit and Bank au Jibun. The value of the manufacturing purchasing managers index (BMI) calculated by the bank decreased by 52.2 points from 52.4 in the previous month, indicating a slight improvement in production conditions. (A BMI value greater than 50 indicates an increase in performance.)

Among the major components, both production and new order growth fell to their lowest levels in half a year, due in part to rising infections and stagnating raw material supplies, according to IHS Markit economist Osama Bhatti.

Photo: shutterstock

Export orders and sales also grew at a slower pace, the labor shortage eased, and new job growth was the lowest since April. In parallel, the backlog of work for orders increased less than in June. Producer prices have risen sharply, by about 5 percent, and although consumer prices are starting to rise, they are far from keeping pace with changes in producer prices.

The outlook remains strongly positive, albeit slightly lower than in June.

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