Commentary from the Markit report:
- “Latest PMI data pointed to a sustained expansion in the Japanese manufacturing sector at the end of 2021. Despite easing slightly from November, firms continued to note moderate growth in both production and new orders, with both measures reading above their respective annual averages in December.
- “Domestic markets were buoyed by a gradual recovery from the COVID-19 pandemic however a sharp rise in cases, particularly in South Korea hindered international demand and continued to disrupt supply chains across the sector.
- “Delivery delays and material shortages remained a dampener on production and sales, as manufacturers commented on sustained difficulty in sourcing and receiving inputs. Average lead times across the final quarter of 2021 deteriorated further compared to the previous quarter, and registered the worst quarterly performance since the survey began.
- “Though still optimistic, Japanese goods producers were wary of the continued impact of the pandemic and supply chain disruption, which resulted in confidence dipping to the softest since August.”
The slight dip leaves the index still well in expansion. Familiar themes there in the commentary, supply chain woes continue to be prevalent.