Factory growth at 4-month high of 51.8 in July: PMI

Manufacturing activities gathered pace in July, compared to the previous month to post a four-month high expansion on high demand from both domestic and external markets, showed the widely-tracked Nikkei purchasing managers’ index (PMI).

PMI inched up to 51.8 points in July, against 51.7 in the previous month, indicating a further improvement in overall business conditions across the sector. The July number showed marked improvement, compared to near-flat manufacturing growth in April this year, when the index had stood at 50.5 points.

Supported by greater demand from both domestic and external markets, total new business rose at the fastest pace since March, said Markit Economics, the compiler of PMI.

The expansion in order books was led by consumer goods producers.

Growth of new export orders climbed to a six-month high, with increases seen in the consumer and capital goods.

Official data also showed that merchandise exports rose 1.27 per cent in June, for the first time after 18 months of contraction. However, the index of industrial production showed capital goods output declined for the seventh month on a trot in May.

July saw input costs rise at the slowest pace in five months. Although inflation accelerated, the rate of increase was only slight and remained below its long-run average. Factories struggle as world demand sputters