Japan services sector growth at fastest rate in two years

Japan services sector growth at fastest rate in two years

A couple is seen sitting at an outdoor table of a restaurant in Ikebukuro area amid the coronaviruses COVID 19 outbreak in Tokyo.

TOKYO Reuters Japan's services sector activity grew at the fastest pace in more than two years in November on a jump in new business, signalling stronger consumer confidence as the coronaviruses epidemic subsided.

The world's third-largest economy has lagged other advanced nations in its recovery from the Pandemic, as the coronaviruses prevent activity for parts of the year.

The final Au Jibun Bank Japan Services Purchasing Managers' Index PMI rose to 53.0 from the previous month's 50.7 and 52.1 flash reading.

It was the fastest pace of expansion since August 2019.

As panel members said the lifting of state of emergency measures had boosted confidence and sales, new orders increased for the first time since January 2020, said Usamah Bhatti, economist at IHS Markit.

Japanese service providers have decreased staffing levels for the first time since July, despite increasing demand and evidence of pressure on capacity. A persistent global chip shortage and rising raw material prices pressure manufacturers, so spending on dining out, overnight stays and other services would likely support Japan's economy.

In November, both manufacturers and services firms pointed out major rises in cost pressures, according to Bhatti.

The composite PMI, which is estimated to include both manufacturing and services, increased at the fastest rate in more than four years, rising to 53.3 from October's final of 50.7.