The S&P Global Japan Manufacturing PMI declined to 51.4 in March 2026 from 53.0 in February, when it had reached a near four-year high. The reading came in below market expectations of 52.8, according to flash estimates, and marked the weakest level since December 2025.
The slowdown was driven primarily by a notable easing in new order growth, with total new export business expanding at the softest pace seen during the current three‑month expansion. Manufacturers continued to add to their workforces in March, though the rate of job creation moderated.
On the price front, input cost inflation accelerated to its highest level in almost a year, in part reflecting the impact of the Middle East conflict on supply chains and energy prices. In contrast, output charges rose at the slowest pace in three months.
Despite these headwinds, Japanese manufacturers remained optimistic about the year‑ahead outlook. That said, business confidence slipped to an eleven‑month low, weighed down by increased uncertainty stemming from the geopolitical tensions in the Middle East.
