Japan’s PMI Services was finalized at 53.1 in October, slightly below September’s 53.3. PMI Composite edged up to 51.5 from 51.3 as strength in services offset continued weakness in manufacturing.
According to Annabel Fiddes, Economics Associate Director at S&P Global Market Intelligence, the survey signaled “further solid expansion” in services output, though other indicators were “not quite as upbeat.”
New business growth slowed sharply, expanding at its weakest pace in 16 months, and foreign demand remained in contraction. At the same time, inflationary pressures intensified, with both input and output prices rising faster, largely due to higher labor costs. Confidence also softened as firms expressed concern about labor shortages and subdued customer demand.
The main risk now lies in intensifying price pressures in both manufacturing and services, which “will be important to monitor in the coming months”.
