Japan’s S&P Global Composite PMI Business Activity Index slipped to 52.1 in October 2026, down from both the flash estimate and September’s final reading of 52.3. Although this was the lowest level since May, it still signaled an expansion in private-sector activity for the 19th consecutive month.
Growth in services activity picked up slightly, but this was more than offset by a slowdown in manufacturing output. Overall new orders rose at the same modest pace as in September, and total sales continued to be supported by stronger export demand. However, growth in new export business eased to a four-month low.
On the labor front, employment growth weakened to its slowest pace in a year. At the same time, business confidence regarding activity in the year ahead fell to a three-month low, pointing to a more cautious outlook among firms.
In terms of prices, input costs continued to increase sharply by historical standards. However, the rate of inflation in output prices eased to a four-month low, indicating some moderation in firms’ price-setting pressures.
