TOKYO, March 31 Japanese manufacturing activity
expanded at a slower pace in March, a survey showed on Monday,
pulling back further from an eight-year high set in January as
heavy snow in some areas curbed production.
The Markit/JMMA Japan Manufacturing Purchasing Managers
Index (PMI) fell to a seasonally adjusted 53.9 in March from
55.5 in February.
The index remained above the 50 threshold that separates
expansion from contraction for a 13th consecutive month but
showed that growth slowed for a second straight month.
"Firms attributed this increase in output to last minute
demand before the increase in the sales tax from 5 percent to 8
percent, which is due to be implemented in April this year,"
said Amy Brownbill economist at Markit.
"It will be interesting to see whether output in the
manufacturing industry will continue to grow as fast after the
increase in the sales tax is implemented."
The output component of the PMI index fell to 54.2 from 58.4
in February, indicating the slowest growth in six months due to
disruptions caused by unusually cold weather.
The index for new export orders rose to 52.3 in March from
51.5 in the previous month as orders from China and the
Philippines strengthened, the survey showed.
Prime Minister Shinzo Abe's government will raise the sales
tax from April 1 to pay for rising welfare costs.
Since the middle of last year, sales of apartments, houses,
cars and durable goods have been rising as consumers look to buy
big-ticket items before the tax increase.
There are also signs that consumers stocked up on daily
goods in the days leading up to the tax hike.
Many economists expect the sales tax increase to slow growth
temporarily, but there are lingering concerns the economy will
not rebound quickly, which would increase the need for stimulus
(Reporting by Stanley White; Editing by Jacqueline Wong)