Growth in Japan's manufacturing activity in May rose to the highest level since February as output volumes and new orders expanded and employment levels rose on company optimism regarding future output, final data from IHS Markit and Nikkei showed June 1.
The Japan Manufacturing Purchasing Managers' Index, or PMI, ticked up to 53.1 in the month, from 52.7 in April. It was higher than the flash estimate for May of 52.0 and marked the ninth successive month above the 50 mark that separates growth from contraction, IHS Markit and Nikkei said.
Growth was underpinned by stronger demand in both the domestic and foreign markets, with the fastest increases in output and total new orders, along with the strongest employment growth, coming in the capital goods sector.
"Consistent with an underlying rise of around 2%, the industrial sector is subsequently set to make a positive contribution to national output for Q2," said Paul Smith, senior economist at IHS Markit.
About 30% of manufacturers surveyed forecast growth from present levels.