Japan’s Nov service activity grows at slowest pace in a year – PMI
2023.12.04 23:06
© Reuters. FILE PHOTO: Customers have lunch at restaurants next to a record shop which has a large poster on its wall in Tokyo, Japan, July 4, 2018. REUTERS/Kim Kyung-Hoon/File Photo
TOKYO (Reuters) – Japan’s service activity expanded at the slowest pace in a year in November, weighed by an accelerating decline in new exports and softer demand, however, the outlook for the sector remained upbeat, a business survey showed on Tuesday.
The service sector has been a bright spot for the world’s third-largest economy, helping offset the drag to growth from struggling manufacturing.
The final au Jibun Bank Service purchasing managers’ index (PMI) slipped to 50.8 in November from 51.6 in October, according to index publisher S&P Global Intelligence.
The index was below the flash reading of 51.7 but remained above the 50.0 threshold separating expansion from contraction.
New business edged up from last month while new export business fell for the second straight month.
However, this year’s headline figure has trended at the highest annual reading since the survey began in 2007 thanks to a post-pandemic economic recovery, according to the survey.
“November data signalled a further loss of momentum in the services sector, but this should be viewed in the context of a year of strong growth,” said Trevor Balchin, economics director at S&P Global Market Intelligence.
For November, higher workloads and new store openings pushed up employment, though the pace was slightly weaker than in October.
The input price, though still high due to labour and fuel costs, marked its weakest growth in over two years. Prices charged by providers rose at the slowest pace in 10 months.
Service providers’ outlook for the next 12-months hit a three-month high and was among the highest recorded, anchored by prospects of strong demand and business expansion.
The composite PMI, which combines the manufacturing and service activity figures, dropped to 49.6 in November from 50.5 in October, falling into the contraction territory for the first time since December last year.
