Japan Skyrockets in Service Sector Growth
ZFX - Japan's service sector activity grew at its fastest pace in more than two years in November as new business surged, signaling stronger consumer confidence as the coronavirus pandemic eases.
The world's third-largest economy has lagged behind other developed economies in recovery, as the pandemic hit with coronavirus-related activity restrictions for part of the year.
The au Jibun Bank Japan Services Purchasing Managers' Index (PMI) last rose to a seasonally-adjusted 53.0 from 50.7 the previous month and a quick reading of 52.1.
That marked the fastest pace of expansion since August 2019.
"New orders rose for the first time since January 2020 as panel members said lifting the state of emergency had boosted confidence and selling," said Usamah Bhatti, economist at IHS.
"Despite increasing demand and pressure on capacity, Japanese service providers are lowering staff levels for the first time since July."
Stronger spending on dining out, lodging and other services is likely to support the Japanese economy as persistent global chip shortages and soaring raw material prices weigh on producers.
"Both manufacturers and service companies showed notable increases in cost suppression in November," Bhatti said.
The composite PMI, which is forecast to use both manufacturing and services, expanded at the fastest rate in more than four years, rising to 53.3 from October's final 50.7.
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