Service sector

Japan’s service sector activity growth slows in December -PMI

People sit at a restaurant using plexiglass dividers to protect customers from coronavirus disease (COVID-19) in the Shibuya area of ​​Tokyo, Japan on July 29, 2021. REUTERS / Androniki Christodoulou

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TOKYO, Jan.6 (Reuters) – Activity in the service sector in Japan grew at a slower pace in December as new and open business growth slowed and expectations for the 12 months to come fell to their lowest level in four months.

The world’s third-largest economy is expected to rebound in the last quarter of last year after the drop in COVID-19 cases, as it seeks to catch up with other advanced countries in its recovery from the hit of the pandemic.

Jibun Bank Japan Services’ Final Purchasing Managers Index (PMI) fell to seasonally adjusted 52.1 from the previous month’s 53.0, which was the highest reading since August 2019.

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The figure is compared to a flash reading of 51.1.

“Companies in the Japanese service sector have reported a sustained expansion in trading conditions at the end of 2021,” said Usamah Bhatti, an economist at IHS Markit, who is compiling the survey.

“The easing of restrictions related to COVID-19 has allowed businesses that have direct contact with customers to operate more freely throughout the last quarter of the year. “

However, businesses reported raw material and labor shortages, with employment levels falling to 15-month low, while business optimism for the coming year improved at its slowest pace since September.

The private sector as a whole saw costs rise at the end of the year amid persistent shortages of materials and delays in the supply chain, Bhatti said.

“Fears that the disruption will continue into the New Year were high,” he added.

The Composite PMI, which is calculated using both manufacturing and services, fell to 52.5 from the November final of 53.3.

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Reporting by Daniel Leussink; Editing by Sam Holmes

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