The Japanese economy continues to skid as evidenced by the October Japan Manufacturing PMI™

Key points

  • Output and new orders both down at sharper rates
  • Employment falls at fastest pace since July 2009
  • Average output charges pared to steepest degree since December 2009


October’s PMI data indicated a further deterioration in the performance of the Japanese manufacturing sector. Orders and output both continued to fall during the month, while evidence of rising excess capacity led to a first reduction in employment for half a year. Manufacturers also intentionally cut back on their stock holdings as order books deteriorated and the outlook remained uncertain.

Production and new orders both fell at similarly marked rates during the latest survey period. Panellists reported that the car industry was a particular source of softer demand. Overseas new orders also fell during the month, the seventh successive month that a decline has been recorded.

As volumes of new orders and output fell further in October manufacturers were again able to make significant inroads into their work outstanding. Nearly a quarter of the survey panel indicated that backlogs were down in October and, with spare capacity seemingly rising, a number of companies also chose to lower their staffing levels.

I have little to add that I have not said before numerous times. The entire global economy is heading South in a major way, and Japan is in serious trouble given its monstrous debt levels.

Mike “Mish” Shedlock