Covid-19 Surge Hits Japan’s Private-Sector Activity In August, Shows PMI Data

Business in the services sector in Japan slowdown in August at the fastest pace since May last year while factory activity growth in the economy also declined which is reflective of the hit on the economy of the latest wave of Covid-19 infections and the associated restrictions being imposed.

The impact of the resurgence of the pandemic was mostly withstood by Japanese manufacturers. The latest surge in Covid-19 cases in Japan is because of the highly contagious Delta variant of the coronavirus which has forced government in Japan and other Asian nations to re-impose lockdowns and other pandemic related restrictions.

In August, the au Jibun Bank Flash Japan Manufacturing Purchasing Managers’ Index (PMI) dropped to a seasonally adjusted 52.4 compared to a final reading of 53.0 in July.

On the overall however, there was an increase in orders and export orders even though the pace of growth was at its slowest in the past seven months. IHS Markit said that severe supply chain disruptions from a global semiconductor shortage were faced by firms.

A surge in Delta variant cases dealt a blow to activity in Japan’s services sector as the government was forced to extend and expand the fourth state of emergency in the country which effectively covered about 60 per cent of the total population.

The au Jibun Bank Flash Services PMI index dropped to a seasonally adjusted 43.5 from the previous month’s final of 47.4, hitting its lowest since May 2020, when Japan’s economy went through a deep Covid-19 slump.

Usamah Bhatti, economist at IHS Markit, which compiled the survey said that business activity for the overall private sector was pushed down by the weak reading as it contracted at the fastest pace since August 2020.

“The decline in overall private sector activity was led by the larger services sector, where business activity fell for the 19th consecutive month,” Bhatti said.

“Private sector businesses noted that the recent surge in COVID-19 cases related to the Delta variant had dampened prospects.”

The au Jibun Bank Flash Japan Composite PMI, which is estimated by using both manufacturing and services, fell to 45.9 from July’s final of 48.8, hitting its lowest since August last year.

(Adapted from

Categories: Economy & Finance, Entrepreneurship, Regulations & Legal, Strategy, Sustainability

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