Service sector

Japan’s service sector activity is growing at the fastest pace in 2 years

A couple is seen sitting at an outdoor table in a restaurant in the Ikebukuro area amid the coronavirus disease (COVID-19) outbreak in Tokyo, Japan, August 2, 2021. REUTERS / Androniki Christodoulou

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TOKYO, Dec.3 (Reuters) – Japan’s service sector activity grew at the fastest pace in more than two years in November on a surge in new business, signaling stronger consumer confidence as the pandemic of coronavirus has calmed down.

The world’s third-largest economy has lagged behind other advanced countries in its recovery from the pandemic with the coronavirus which slows down the crimping activity for part of the year.

Jibun Bank Japan Services’ Final Purchasing Managers Index (PMI) rose to seasonally adjusted 53.0 from 50.7 the previous month and a flash reading of 52.1.

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This marked the fastest pace of expansion since August 2019.

“New orders rose for the first time since January 2020, with panel members citing that lifting of the state of emergency measures had boosted confidence and sales,” said Usamah Bhatti, economist at IHS Markit, who compiles the survey.

“Despite growing demand and evidence of pressure on capacity, Japanese service providers have downsized for the first time since July.”

Greater spending on restaurant meals, overnight stays and other services would likely support the Japanese economy as a persistent global shortage of chips and soaring commodity prices put pressure on manufacturers.

“Manufacturers and service companies reported a significant increase in cost pressures in November,” Bhatti said.

The composite PMI, which is estimated using both manufacturing and services, rose at the fastest pace in more than four years, rising to 53.3 from 50.7 in October.

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Reporting by Daniel Leussink; Editing by Sam Holmes

Our Standards: Thomson Reuters Trust Principles.