Japan Factory Decline Slows in November
By Reuters | 30 Nov, 2025

Japan's November Purchasing Manager's Index (PMI) improved to 48.7 from 48.2 in October due to a slight improvement in consumer goods despite sluggishness in intermediate and investment goods.

Japan's manufacturing activity shrank for the fifth consecutive month in November, weighed by sluggish demand, though the outlook improved slightly, a private-sector survey released on Monday showed.

The S&P Global Japan Manufacturing Purchasing Managers' Index (PMI) slightly improved to 48.7 in November from 48.2 in October, roughly in line with the flash reading of 48.8. The rate of decline was the slowest since August. PMI readings above 50.0 indicate growth, while those below show contraction.

Sub-sector figures showed intermediate and investment goods segments continued to face weakness, but consumer goods saw a slight improvement.

New orders continued to decline in November, stretching the downturn to two-and-a-half years, according to the survey. The respondents surveyed blamed factors including sluggish global business environment, tighter client budgets and subdued capital investment.

Weaker demand across the automotive and semiconductor industries was also noted, the survey said.

Input cost inflation accelerated for the fourth straight month in November, driven by higher labour and raw material costs. To reflect that, firms increased selling prices at a solid pace.

At the same time, business confidence for the next 12 months reached a 10-month high, buoyed by optimism about new product releases and recovery in demand, especially in electronic equipment and transport.

To boost economic growth, Prime Minister Sanae Takaichi's cabinet has approved a 21.3 trillion yen economic stimulus package.   

"It will be important to see how this impacts demand and the sector's performance as the administration seeks to boost investment in key strategic areas such as AI," said Annabel Fiddes, economics associate director at S&P Global Market Intelligence.

(Reporting by Satoshi Sugiyama; Editing by Sam Holmes)