November 1, 2017 / 12:38 AM / a year ago

Japan final October factory PMI shows growth slowed less than expected

FILE PHOTO: An employee works at a beer production line at Japanese brewer Kirin Holdings' factory in Toride, Ibaraki Prefecture, Japan July 14, 2017. REUTERS/Kim Kyung-Hoon/File Photo

TOKYO - Japanese manufacturing activity in October slowed less than initially thought, a revised private survey showed on Wednesday, in a sign that demand remains strong enough to support economic growth.

The final Markit/Nikkei Japan Manufacturing Purchasing Managers’ Index (PMI) was a seasonally adjusted 52.8, above the preliminary reading of 52.5 and just below September’s final reading of 52.9.

The index remained above the 50 threshold that separates expansion from contraction for the 14th consecutive month.

“The headline PMI for October indicated slightly softer growth, however the underlying data remains fairly solid,” said Joe Hayes, economist at IHS Markit, which compiles the survey.

“Output picked up, growing at the quickest pace since May, while export orders from other Asian countries underpinned a firm rise in new business inflows.”

The output component of the PMI index was a final 53.3, above a preliminary a 52.6 and above a final 53.2 in September.

The final index measuring companies’ expectations for future output was higher than the preliminary reading and remained firmly positive, but was at an 11-month low.

The PMI survey comes one day after government data showed manufacturers expect output to rise in October and then fall in November as they adjust production in electronics parts in response to shifting demand from China.

Recent data has shown a slight slowdown in exports and industrial output, but economists remain optimistic that a tight labor market and rising business investment will keep growth on track.

Reporting by Stanley White; Editing by Richard Borsuk

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