Japan service sector activity slows from 5-month high, PMI shows

TOKYO, Oct 5 (Reuters) - Japan's ‌service sector expanded ​at ​a weaker pace in September as business activity and new orders grew more slowly and earthquake disruption dampened demand, a ‌business survey showed on Monday.

• The S&P Global final Japan ⁠Services Purchasing Managers' Index (PMI) eased to 51.3 in September from a five-month high of ‌52.5 in August, a survey ‌by S&P Global showed, worse than a flash reading of 51.6. The 50-mark separates growth from contraction.

• "PMI survey data pointed to a softer ​expansion of Japan's service sector as the third quarter drew to a close, with businesses signalling slower increases in business activity and ⁠new orders," said Annabel Fiddes, Economics Associate Director at S&P Global Market Intelligence.

• New orders rose ​for a 27th straight month, but the pace eased from August. S&P Global said stronger domestic demand continued to ​support sales, while new export business fell ‌again at the second-sharpest rate since January 2021.

• Employment increased for a 13th consecutive month and at the ⁠fastest pace since February, the survey showed. Companies also reported the strongest rise in backlogs of work in seven months as they sought to expand capacity and ⁠fill vacancies.

• Input cost inflation eased to a six-month low but remained elevated by ​historical standards, with firms citing higher raw materials, oil, labour and food costs. Charges levied by service providers also rose again, though output price inflation softened from ‌August.

• The broader Composite PMI, which includes both manufacturing and services, fell to 52.3 in September from 53.5 ‌in August, its weakest since May.

• The Bank of Japan's quarterly "tankan" survey released ⁠on Thursday showed Japanese manufacturers' ‌confidence hit an eight-year ​high over July-September but non-manufacturers' mood soured, painting a mixed picture of the economy.

(Reporting by Satoshi Sugiyama; Editing by ‌Jacqueline Wong)

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