Factory activity of Japan grew at the fastest pace in four years in January amid shortage of chip storage and rising input prices.
The au Jibun Bank Flash Japan Manufacturing Purchasing Managers’ Index (PMI) rose to a seasonally adjusted 54.6 from the prior month’s final of 54.3 to mark the fastest pace of expansion since January 2018.
However, private sector activity slipped into contraction for the first time in four months due to surge in omicron cases in the country.
A gauge showed that manufacturers reported fastest increase in output prices since July 2008 which implies that higher prices are passed on to the consumers.
The au Jibun Ban Flash Services PMI Index slumped to a seasonally adjusted 46.6 from December’s final 52.1 to contract at the fastest pace in five months.
“Private sector firms reported that the surge in COVID-19 cases from the more transmissible Omicron variant had hindered client confidence,” said Usamah Bhatti, economist at IHS Markit, which compiles the survey, as reported by Reuters.
Usamah also added, “Disruption was also reported in the labour market, where employment levels fell for the first time in a year.”
