Japan March manufacturers PMI falls on slowing orders

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TOKYO, March 31 (Reuters) - Manufacturing activity in Japan contracted for the first time in five months, reflecting sluggish demand and a fall in output, a survey showed on Monday.

The NTC Research/Nomura/JMMA Purchasing Managers Index, which gives an early snapshot of the health of manufacturing, declined to a seasonally adjusted 49.5 in March from 50.8 in February.

In the PMI, compiled from a string of diffusion indexes and based on responses from more than 350 manufacturers, a reading above 50 suggests expansion, while a figure below points to a contraction.

"The latest survey painted a rather bleak picture, with both output and new orders contracting concurrently for the first time in five months," said Paul Smith, economist at NTC Research.

The PMI's output index, which approximates industrial production, declined to 48.5 in March from 50.9 in the previous month, falling below the 50 threshold for the first time in five months.

Respondents to the survey pointed to weakness in incoming new orders as a major reason behind the decline in output, a report on the survey said.

The sluggishness in output was most conspicuous in the electrical and electronics as well as the timber and paper sectors, the report said.

The new orders index, a barometer of future demand that combines goods orders from both home and abroad, slipped to 47.2 from 50.4 in February, hitting the lowest level since July last year.