Japan service sector slows down in November

Japan’s services sector slowed down in November, figures released on Thursday showed.

The Markit/Nikkei final services purchasing managers’ index fell from 52.2 in October to 51.6, although it remained above the 50 threshold that indicates expansion for the eight consecutive month.

The sub-index tracking new business declined from 51.8 to 51.6, although the outstanding business component of the PMI index rose from 51.2 to 51.4.

Total new business in November, however, the rate of increase eased and was weaker than the average seen over the current eight-month sequence of growth. Meanwhile, new orders at Japanese manufacturers increased at a solid rate.

“A combination of new order growth and a drop in staff numbers consequently led to overcapacity and an increase in work outstanding,” said Markit’s economist

“Despite this, service providers remain upbeat towards output growth over the next 12 months, with business sentiment picking up from October’s five-month low.”