August 30, 2012 / 11:16 PM / 7 years ago

Japan August manufacturing PMI at lowest level in 16 months

TOKYO (Reuters) - Japanese manufacturing activity contracted in August to the lowest level in 16 months, a survey showed on Friday, as the weakening global economy continued to weigh on exports and industrial output.

The Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 47.7 in August from 47.9 in July.

The index remained below the 50 threshold that separates contraction from expansion for the third straight month and was the lowest reading since April 2011, one month after a record earthquake, tsunami and ensuing nuclear disaster struck Japan’s northeast coast.

“The data provide further evidence to suggest that growth in the world’s third largest economy is faltering in the face of weakening global demand conditions,” said Alex Hamilton, an economist at Markit.

“Overall new business declined at a solid rate, while the index measuring trends in factory output fell further over the month.”

The index for new export orders, a leading indicator of Japanese exports, rose to 45.5 from 43.2 in the previous month but remained below the 50 threshold for the fifth consecutive month.

The output component of the PMI index fell to 46.9 from July’s 47.3, also the lowest reading since April last year.

Reporting by Stanley White; Editing by Kim Coghill

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