Japan's private sector experienced its most rapid expansion in nine months this May, driven by a recovery in manufacturing activity for the first time in a year, according to preliminary data from S&P Global released on Thursday.
The au Jibun Bank flash composite output index rose to 52.4 in May, a slight increase from 52.3 in April. Any score above 50.0 signifies expansion.
This marks the third consecutive month of private sector growth and the swiftest pace since August 2023.
"Evidently, growth momentum continued to improve as we moved into the second quarter of 2024, suggesting a potentially stronger Q2 GDP reading following an underwhelming first quarter," commented Jingyi Pan, Economics Associate Director at S&P Global Market Intelligence.
While the overall private sector expansion was primarily fueled by services activity, the near-stabilization in manufacturing output indicates potential for a broader growth base later in the year, Pan added.
The services Purchasing Managers' Index (PMI) fell to 53.6 from 54.3 in the previous month. Meanwhile, the manufacturing PMI increased to 50.5 in May from 49.6 in April.
