AI TRENDS | Japan Manufacturing Posts Strongest Quarterly Performance in Over 12 Years, PMI Survey Shows

Japan’s manufacturing sector recorded its strongest quarterly performance in more than 12 years in June, supported by improved demand and rising output. According to Jin10, S&P Global Market Intelligence Deputy Director Annabel Fiddes said the latest PMI survey showed factories continued to expand production at a solid pace as customer demand improved again. Overall new business growth was the fastest in nearly four and a half years, with strong demand linked to AI-related technologies and semiconductors. Fiddes noted that growth was also driven, at least in part, by stockpiling behavior by companies amid the backdrop of war in the Middle East. The survey also indicated a renewed and sharp deterioration in supplier performance in June due to shipping delays and supplier shortages. As a result, inflation pressures remained among the most severe since the survey began in 2001, with both input costs and selling prices rising rapidly again in June. Fiddes said there was significant uncertainty over whether the strong performance could continue into the second half of the year, as short-term stockpiling activity could fade quickly, particularly as costs keep climbing and customer spending faces greater pressure.