Japan services PMI grows for fifth straight month in October

Japan’s service sector continued to expand in October, marking the fifth consecutive month of growth, purchasing managers index data showed released Thursday.

The S&P Global final Japan Services PMI rose to 51.7 in October from 51.3 in September. The reading came in below the flash estimate of 52.0. A reading above 50 indicates expansion, while below 50 signals contraction.

New orders increased for the 28th consecutive month, with the growth rate accelerating from September. Companies reported stronger domestic demand, new clients and business development efforts as contributing factors.

Foreign demand remained weak, though the decline in new export orders slowed to its weakest pace since April.

Cost pressures continued to ease, with input price inflation slowing for the fourth straight month to an eight-month low. Output price inflation also moderated, though prices have risen every month for the past four and a half years.

Business confidence fell to its lowest level since March. Companies cited concerns over inflation, an aging population and labor shortages as factors that tempered optimism about growth in the defense and technology sectors, business expansion plans and increased tourism.

Japan’s composite PMI index declined to 52.1 from 52.3, representing the softest growth pace since May. Stronger growth in services activity was offset by a slowdown in manufacturing output.