2023.06.0501:20:00UTC+00Japan Services Sector Accelerates In May - Jibun

The services sector in Japan continued to expand in May, and at a faster pace, the latest survey from Jibun Bank showed on Monday with a services PMI of 55.9.

That's up from 55.4 in April, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

There were record expansions in business activity, total new business and new export orders as firms noted a strong increase in demand following the lifting of remaining pandemic-related restrictions. Moreover, data indicated that the upturn is likely to be sustained in the near-term as the level of work in hand (but not yet completed) also increased at a record rate as service providers noted the impact of rising demand on existing capacity.

The survey also showed that the composite index grew from 52.9 in April to 54.3 in May.

There was a series record upturn in new order inflows at Japanese private sector firms, led by an unprecedented rise at service providers. This contributed to a solid increase in backlogs of work that was the strongest since the survey record set in June 2022. In order to ease capacity pressures, private sector employment levels were raised to the greatest extent since June 2017.