Japan’s services business activity rises to a five-month high
Japan’s services sector grew at its fastest pace in five months in August, thanks to stronger domestic demand, which supported business activity and an inflow of new orders. Channel NewsAsia reports, citing Reuters, on the results of a private survey.
PMI index growth
The final S&P Global Japan services business activity index rose to 52.5 points in August from 51.2 points in July. The 50-point mark separates growth in activity from contraction.
New orders increased for the 26th consecutive month, and at a faster pace than in July. The survey attributed this to resilient customer demand. At the same time, new export orders declined for the fifth consecutive month, with the pace of decline becoming the sharpest since November 2020.
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Costs and employment
Employment in the services sector increased for the 12th consecutive month, though only marginally. This was the slowest pace of job creation in a year.
Input cost inflation slowed to a four-month low, although it remained among the highest levels of the past three and a half years. Companies raised prices for customers at the second-fastest pace on record, passing costs on to them.
The composite PMI, covering manufacturing and services, rose to 53.5 points from 52.7 points in July. This was the strongest reading in six months. Business sentiment improved compared with July but remained subdued by recent standards.
