The services sector in Japan continued to contract in March, albeit at a slower rate, the latest survey from Jibun Bank revealed on Tuesday with a services PMI score of 49.4.
That’s up from 44.2 in February, although it remains beneath the boom-or-bust line of 50 that separates expansion from contraction.
While firms were still impacted by high case numbers, others reported that the easing of restrictions had boosted customer numbers. New business inflows returned to expansion territory for the first time in three months during March. The rise was only marginal, as panelists noted that domestic demand strengthened as COVID-19 restrictions were lifted. However, new export orders saw the rate of decline accelerate to the fastest since January 2021 as a result of renewed restrictions across China and uncertainty due to the Russia-Ukraine war.
The survey also said its composite index moved into expansion at 50.3 in March, up from 45.8 in February.
Growth was driven by a renewed rise in manufacturing output while services firms noted a much softer decline. Aggregate new orders also rose modestly for the fifth time in six months, and at the strongest since last December. Service providers noted the first upturn for three months while growth continued at manufacturers.