TOKYO (Reuters) – Japan’s services sector activity rose for the first time in 21 months in October as consumer confidence rebounded after the end of the coronavirus pandemic, providing a broad-based boost to Requirement.
In September, the government ended state of emergency restrictions to contain the health crisis, as new cases and deaths declined rapidly this month and the burden on the medical system eased. lightened.
“Japanese service-sector firms reported that activity had returned to expansion territory for the first time in nearly two years,” said Usamah Bhatti, an economist at IHS Markit, which compiled the survey.
“Companies continued to build capacity in anticipation of a gradual recovery in demand, despite the rate of job creation slowing to its lowest level in three months.”
Jibun Bank Japan’s final Services Purchasing Managers’ Index (PMI) rose to 50.7 seasonally adjusted from 47.8 the previous month, matching a flash reading.
This means services sector activity remained above the 50.0 threshold that separates contraction from expansion for the first time since January 2020, before the economy went through its deep COVID-induced meltdown. -19.
The 20 months of decline was the longest such streak since a 27-month run to March 2010, during the global financial crisis.
Some economists hope a stronger recovery in service sector confidence will offset a slowdown in production and exports, which are being hit by a continued global shortage of chips and parts supplies.
The PMI survey showed that the services sector saw the biggest rise in input prices since November 2019, while new and in-progress business remained in contraction despite the expansion in overall business activity.
The composite PMI, which is calculated using both manufacturing and services, rose for the first time in six months to 50.7 from 47.9 in September.
(Reporting by Daniel Leussink; Editing by Sam Holmes)
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