TOKYO, April 3 (Reuters) – Japan’s services sector grew at its weakest pace in three months in March, a private survey showed on Friday, as rising uncertainty over the Middle East war crushed business confidence to its lowest level since the pandemic.
Here are the key details:
• The S&P Global final Japan Services Purchasing Managers’ Index (PMI) fell to 53.4 in March from a 21-month high of 53.8 in February, but topped the flash reading of 52.8 and marked the 12th month of expansion. Readings above 50.0 indicate growth in activity, while those below point to a contraction.
• Among key sub-indexes, new business rose at the slowest pace since December. New export orders, meanwhile, increased at a faster pace from February.
• Business confidence fell to its lowest level since September 2020, as firms expressed concern over the impact and duration of the Middle East war on global demand and inflation.
• Cost pressures intensified sharply, with input prices rising at the fastest pace in nearly a year. The Middle East war contributed to higher costs for raw materials, energy and fuel, according to respondents. However, output charge inflation eased from February’s near 12-year high.
• Employment growth slowed to a five-month low, with some firms citing that candidate shortages and voluntary departures had limited payroll growth.
• Annabel Fiddes, Economics Associate Director at S&P Global Market Intelligence, said: “Uncertainty over how long the Middle East war might go on for, and its impact on global demand and inflation, was a key factor driving down business confidence in March”.
• The broader picture showed Japan’s Composite PMI, which includes both manufacturing and services, fell to 53.0 in March from a 33-month high of 53.9 in February, indicating a slower but still robust growth in overall business activities.
(Reporting by Kantaro KomiyaEditing by Shri Navaratnam)
