Japan’s service activity grew at a record pace in April, a private sector survey showed on Monday, helped by a boost in consumer spending following the end of Covid-19 pandemic restrictions.
The final Purchasing Managers’ Index (PMI) of Jibun Bank Japan Services increased to a seasonally adjusted 55.4 last month from 55.0 in March. For a seventh consecutive month, Japan’s service was also higher than the flash reading of 54.9 and much over the 50-point threshold that separates expansion from contraction.
Tim Moore, director of economics at S&P Global Market Intelligence said that the strong increase in vacation, travel and tourism spending underpins the Japanese economy’s rapid recovery for another month as the impact of Covid-19 continues to fade. He also added that there were many reports citing that the recovery in tourist arrivals and new business from abroad helped increase sales.
Japan ended its strict Covid restriction controls on Saturday, in hopes of easing congestion at airports before the start of the week-long holiday. Visitors to Japan also jumped to 1.82 million people in March, the highest since the Covid-19 pandemic.
Moore says that about four times as many service providers expect an increase in activity than they expect a decrease. The employment sub-index also increased to a third and at the fastest rate. This is helped by stronger demand and trust.
Since June 2022, the growth rate of the composite PMI, which includes manufacturing and services data, has been at its highest point. The index stayed over the break-even point of 50 for four consecutive months in April, remaining at 52.9 from the previous month.