Japan’s manufacturing sector expanded at its fastest pace in nearly four years in February, driven by strong domestic and overseas demand that boosted output, new orders and hiring, a private-sector survey showed on Monday.
The S&P Global Japan Manufacturing Purchasing Managers’ Index (PMI) rose to 53.0 in February from 51.5 in January, marking the strongest expansion since May 2022 and slightly above the preliminary reading of 52.8. A figure above 50 indicates expansion, while a reading below that level signals contraction.
According to S&P Global, manufacturing output, new orders and employment all grew at their fastest rates since January 2022. The surge was attributed to improved global demand conditions and the launch of new products.
New export business expanded at the quickest pace since June 2021, with stronger demand reported from both Europe and Asia. The rebound marks a sharp turnaround from late last year, when export orders had been contracting for nearly four years.
Annabel Fiddes, economics associate director at S&P Global Market Intelligence, said firms were increasingly optimistic about the outlook.
“Firms were also much more upbeat about the year ahead, with confidence rising to the highest since mid-2024. There were expectations that global demand conditions will continue to revive and push up sales in the months ahead, particularly in key sectors such as technology and automotives,” she said.
While inflationary pressures remained elevated, both input and output price increases moderated compared with January. Companies reported that cost burdens were still present but rising at a slower pace.
Overall, the survey suggests Japan’s manufacturing sector is regaining momentum, supported by recovering global demand and improved business confidence heading into the year.