More positively, cost and supply pressures showed further signs of easing and manufacturers continued to raise their staffing levels slightly, extending the current sequence of job creation to 23 months, as per the report.

Japan’s manufacturing PMI dropped to 47.4 in February, down from 48.9 in January, indicating a significant deterioration in the industry’s health, according to a report by Au Jibun Bank. The decline in business conditions mainly reflected steeper reductions in output and new orders, which both fell to the greatest extents since July 2020.

The Au Jibun Bank Japan manufacturing PMI is compiled by S&P Global from survey responses from a panel of around 400 manufacturers.

Andrew Harker, economics director at S&P Global Market Intelligence, said: “The picture was less positive in the manufacturing sector, however, where new orders and production dropped to the greatest extents in just over two-and-a-half years.

“Meanwhile, inflationary pressures remained stubbornly high across the board. Input costs increased at the fastest pace since last October, with firms in turn also raising their output prices at a sharper pace than in January. Companies will be hoping to see price pressures ease meaningfully in the coming months to provide some support to customer demand.”

Fibre2Fashion News Desk (DP)