Japan's factory and services sectors both declined in March, facing rising costs and global uncertainties.

From Yahoo Finance: 2025-03-23 20:34:00

Japan’s factory activity fell at the fastest pace in a year in March, with the manufacturing PMI dropping to 48.3 from 49.0 in February. The service sector also lost momentum, contracting for the first time in five months. Both sectors expressed worries about rising costs, labour shortages, and global trade uncertainty.

Manufacturers saw a decline in production and new orders, leading to cuts in purchasing activity and inventory. Employment increased for the fourth straight month due to a labour shortage. Inflationary pressures remained high, with input costs rising sharply and selling prices increasing.

The overall business outlook in Japan slipped to the lowest level since August 2020. The flash services PMI fell to 49.5 in March from 53.7 in February, the first contraction since October. The composite PMI, combining both sectors, dropped to 48.5 from 52.0 in February, marking the first contraction in five months.

Read more: Japan’s factory activity declines accelerate, services sag, PMI shows