The Nikkei manufacturing Purchasing Managers' Index, or PMI, dropped to 51.0 in March from 52.1 in February. The score was forecast to fall to 54.7.
The latest PMI figures show manufacturing production rose for the 20th successive month, as companies continued to report solid inflows of new work from both domestic and overseas markets. Export growth has more than halved since late previous year, linked in part to the appreciation of the euro and, in some cases, demand is being stymied by higher prices.
In the unweighted model of our choice (the ISM's), respondents are asked whether output, employment, new orders, suppliers' delivery times and stocks of purchases have improved on the previous month, are unchanged or have declined. Results above 50 points indicate expansion with higher results indicating a stronger expansion.
"With cost inflationary pressures also moderating to provide some respite for margins, the sector looks set to make further slow and steady progress as we head through the spring", Rob Dobson, director at PMI compiler IHS Markit, said. However, raw material shortages across the supply chain made the average vendor performance deteriorate in March (but at a modest rate overall).
Although input prices continued to rise sharply in March, the rate of inflation eased markedly from February and was the slowest since August 2017.More news: Meghan Markle Skips First Royal Easter
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Affin Hwang Investment Bank Bhd chief economist Alan Tan said Malaysia's manufacturing growth remains to be in the range of 5% in the first half of 2018 (1H18) supported by the robust economic growth, compared with 6% in 2017.
The pound has gained more than 4 percent against the USA dollar since the end of 2017.
"The sentiment of growth in the manufacturing sector is usually reflected by the industrial production in the country", he told The Edge Financial Daily when contacted.
As has been the case since last November, Indian manufacturers raised their purchasing activity. The Eurozone Citi Economic Surprise Index, a gauge of economic data momentum, now sits at a disparaging -56.8, down from its 2018 high of +59.7 on January 11.