- Manufacturers’ mood index in September +18 vs. August +33
- Service sector index -2 in September vs. +5 in August
- The mood among manufacturers and service companies is improving
TOKYO, Sep 15 (Reuters) – Japanese manufacturers’ confidence deteriorated to a five-month low in September as the effects of the latest wave of COVID-19 put pressure on the world’s third-largest economy, as tankers Reuters poll showed.
Sentiment among manufacturers plummeted as export-dependent companies such as automakers suffered a global chip shortage, according to the monthly survey that tracks the Bank of Japan’s (BOJ) closely watched quarterly Tankan survey due October 1.
The confidence of service companies has shrunk, but should improve again in the next three months, according to the survey.
The grim prospect of current conditions suggests Japan’s economic growth may slow in the third quarter after official data last week showed it rose 1.9% annualized in the three months to June, beating expectations . Continue reading
The survey of 503 large and medium-sized companies between September 1 and 10, of which 264 responded, showed that companies are struggling with sluggish domestic and international demand as a slowdown in China and emerging markets cloud the outlook .
“Due to stagnating parts supply, production and sales activities cannot be carried out,” wrote a manager of a mechanical engineering company in the survey.
“Semiconductor shortages and coronavirus lockdowns in Southeast Asia are having a big impact.”
The Reuters-Tankan sentiment index for manufacturers slipped from a three-and-a-half year high of 33 in August to 18, its lowest level since April. The service index fell from 5 in the previous month to minus 2, according to the survey. (For a detailed table of results click on)
The BOJ’s own “Tankan” business survey, published in July, showed that business confidence among major manufacturers should remain positive in the third quarter after hitting a two-and-a-half year high in the second quarter.
In Reuters Tankan, companies reported the worsening impact of a global chip shortage as the health crisis continued to hamper activities and wider demand, and some said they suffered from higher commodity prices.
“The effects of rising commodity prices are being felt while economies in China and the US are slowing,” a chemical company manager wrote in the survey.
Reuters ‘Tankan poll showed that manufacturers’ business confidence was broadly stable at 19 in December, while that of service companies was expected to climb to 7.
“Because of the fifth wave of the coronavirus, no overnight reservations and banquet reservations are coming in,” said a manager of a service company as a sign of the fragility of private consumption, which accounts for more than half of the Japanese economy.
The Reuters Tankan Index values are calculated by subtracting the percentage of respondents who say conditions are bad from those who say they are good. A positive reading means that the optimists outnumber the pessimists.
Reporting by Daniel Leussink; Editing by Ana Nicolaci da Costa
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