The Nikkei Manufacturing Purchasing Managers' Index, unchanged at 51.4 in September, indicates that the sector continues to remain weak, said DK Joshi, chief economist at CRISIL.
While it has been above the 50-mark that separates growth from contraction for over two years, the growth rate in September and August was the slowest since May 2018.
Joshi, however, said that the PMI data was more or less on expected lines.
“If you look at the PMIs around the world, I think they have dipped below the 50-mark. That said, the manufacturing growth is feeble and it is getting reflected in high-frequency data as well,” he said.
“I also want to point out that PMI doesn’t directly correlates with the manufacturing index of industrial production (IIP). The larger point is that the weakness continues. There is no recovery. It will be very gradual. Once the base effect starts picking up — that would happen more towards the Q3 and Q4 — you might see some improvement in PMI as well,” he added.