The services sector in Japan continued to expand in June, and at a faster rate, the latest Nikkei Services PMI showed on Friday, with an eight-month high score of 51.8.
That’s up from 51.5 in May, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.
The composite index came in at 51.5, easing from 51.6 in the previous month.
“Latest survey data indicated an improvement in business activity in June. Activity growth reached a nine-month high, alongside a marked increase in new orders. Furthermore, business sentiment strengthened from May’s 14-month low in June and was in line with the average seen so far in 2015,” said Markit economist Amy Brownbill.
New business at service sector providers rose for the third consecutive month in June, while the rate of growth reached a seven-month high.
Meanwhile, pressure on capacity was evident at Japanese services firms, as backlogs of work accumulated, in line with further increases in both activity and new orders. Moreover, the rate of accumulation picked up from the prior month and was faster than the average seen in the first half of this year.
Despite reports of improving business conditions, service sector providers reduced their staffing levels in June for the first time in three survey periods.
On the price front, inflationary pressures persisted at Japanese services companies, as input prices rose and at the fastest rate since December 2014.
Similarly, manufacturing purchasing costs rose, albeit at the second weakest pace in the 30-month period of inflation, while charges rose at the fastest rate since January.
Finally, business sentiment was in line with the average seen so far in 2015, having strengthened from May’s 14-month low.
“Meanwhile, inflationary pressures persisted, as reports of higher raw material and staff costs led to an increase in input prices. Subsequently, charges rose and at fastest rate in seven months,” Brownbill said.
The material has been provided by InstaForex Company – www.instaforex.com