TOKYO, Nov 5 (Reuters) – Japan’s service sector expanded modestly in October as activity and new orders both rose slightly faster, a business survey showed on Thursday.
• The S&P Global final Japan Services Purchasing Managers’ Index (PMI) edged higher to 51.7 in October from 51.3 in September, a survey by S&P Global showed, marking a fifth straight month of expansion but coming in below the flash reading of 52.0. The 50-mark separates growth from contraction
• New orders increased for a 28th straight month, with the pace of growth picking up from September, as firms cited firmer domestic demand, new clients and business development efforts as factors
• In contrast, foreign demand remained weak, though the decline in new export orders eased to its slowest since April
• Cost pressures eased further, with input price inflation decelerating for a fourth straight month to an eight-month low. Output price inflation also moderated, although charges have now risen every month for the past four and a half years
• Business confidence weakened to its lowest level since March, as concerns over inflation, an ageing population and labour shortages tempered optimism about growth in the defence and technology sectors, business expansion plans and increased tourism
• Persistent inflation “could also constrain demand and hiring in the months ahead,” said Annabel Fiddes, economics associate director at S&P Global Market Intelligence
• “Whether growth loses further momentum and cost pressures ease will be important considerations for the Bank of Japan as it assesses further policy tightening,” Fiddes added
• Employment rose only marginally, marking the weakest pace of job creation in the current 14-month hiring stretch, the survey showed. Companies cited expansion plans as factors for additions, while resignations and retirements limited overall headcount growth
• Japan’s composite output index slipped to 52.1 from 52.3, its softest growth pace since May. Stronger growth in services activity was countered by a slowdown in manufacturing output, sector data showed
(Reporting by Satoshi Sugiyama; Editing by Jacqueline Wong)
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