The state of the Japanese manufacturing industry declined in September of this year for the third consecutive month, as a result of a persistent decline in new orders and a resumed decline in output levels,as per sources. In the current sequence, employment increased at the slowest rate possible. On the price front, typical operational expenses remained historically excessive; however firms only partially passed these increased costs on to clients. Since mid-2021, output charges have increased at the slowest rate.

Businesses frequently mentioned that economic problems were the reason for a lack of new business coming in. However, other businesses chose to fulfill delayed orders, which somewhat mitigated this. Consequently, work backlogs decreased at a moderate rate, extending the current depletion sequence to two years.

In September, there was a slight decline in the quantity of fresh orders placed with Japanese manufacturers, continuing the trend of the previous month.

The manufacturing sector in Japan continued to face high inflationary pressures. Businesses stated that increased labor, transportation, and raw material costs were major contributors to their increased cost burdens.

September saw a continuation of the upward trend in business confidence, which was reflected in the anticipation that new product demand and mass manufacturing would be successful. Businesses also anticipated a broader economic rebound. But starting in August, the level of confidence decreased and reached its lowest point since December 2022.