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Business activity forecast for Japan picks up from June’s low

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Staff Writer | November 16, 2016
The IHS Markit Business Outlook, which looks at expectations for the year ahead, signals stronger confidence in the Japanese private sector during October.
Business activity Japan
Asia   Markit Japan Business Outlook
The overall net balance for activity is +12% up from +8% in June (the lowest reading since the October 2012 survey period) and thereby signalling greater confidence in business activity.

However, the latest figure is still below the long-run series average (+14%) and the second-lowest among the 12 countries covered by this survey. Both the manufacturing and service sectors have helped to boost overall business confidence in October.

The net balance for output at services firms increased to +10%, over double the proportion of panellists that expected output to increase in June (+4%). Meanwhile, in the manufacturing sector, optimism remains stable, with the net balance staying at +19%.

A number of panellists from both sectors see greater demand stemming from preparations for hosting the 2020 Tokyo Olympic Games, the launching of new products, the delayed sales tax increase and the appreciation of the yen as opportunities for business over the next 12 months.

New orders in the Japanese private sector are forecast to increase at a quicker pace in the year ahead, with the overall net balance picking up from June’s 11- survey low (+9%).

However, the latest figure (+11%) is still below the long-run series average (+13%).