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Japan’s Factory PMI Surges as Australia Barely Returns to Growth

Rising energy and shipping costs now threaten to turn patchy growth into a stagflation risk.

Overview

  • Japan’s factory PMI rose to 54.9 in April, the strongest since January 2022, with output posting the fastest rise since February 2014.
  • Australia’s composite PMI lifted to 50.1 as services picked up to 50.3, even though manufacturing output fell for a third month.
  • Japan’s services growth slowed to 51.2, which capped the composite PMI at 52.4 despite the manufacturing surge.
  • Both surveys reported faster input-cost inflation, driven by higher fuel and shipping expenses that companies are starting to pass on as higher selling prices.
  • Supplier delivery times lengthened and business confidence fell, hitting the lowest since August 2020 in Japan and a near two-and-a-half-year low in Australia, as firms flagged Middle East–related shipping risks.