Japan’s service sector activity deteriorated in June, led by the fastest decline in new orders in nearly five years, results of a survey by Markit Economics showed Tuesday.
The services purchasing managers’ index, or PMI, fell to 49.4 in June from 50.4 in May.
Any reading below 50 indicates contraction, while a score above 50 suggests expansion in the sector. It was the second contraction in this quarter.
The Nikkie composite output index, which combines scores from the manufacturing and services indexes, dropped to 49.0 in June from 49.2 a month ago.
New orders received by the Japanese service providers contracted for the first time in one-and-half years and at the quickest rate in 57 months. The April earthquakes were cited as the key factor driving down demand.
Production at manufacturers declined for the fourth month running in June, though at a slower pace.
Services firms shed some of their payroll numbers in June. Employment at manufacturers increased at the slowest rate in the current nine-month sequence of growth.
“Business sentiment also eased to the weakest in over one year, as uncertainty surrounding the Chinese economy and fears that demand will fall due to the impending sales tax increase weighed on positivity,” Amy Brownbill, economist at Markit, said.
The material has been provided by InstaForex Company – www.instaforex.com