Japan’s services sector maintained solid growth in September. The S&P Global Japan Services Business Activity Index rose to 53.3 from 53.1 in August, according to data released Friday.
This was the second-strongest pace since February and marked the sixth straight month of expansion. Finance & Insurance led the gains, while every sector except Real Estate & Business Services reported stronger activity.
New business continued to grow at a steady rate, supported by new client acquisitions and business development. However, foreign demand for Japanese services fell again.
Hiring improved for the first time in three months, as service providers added staff to meet demand. The increase was modest, but capacity pressures remained, with backlogs still rising—though more slowly than August’s peak.
Input costs remained high, driven by wages, raw materials, and fuel, but inflation eased slightly from the prior month. Companies passed on costs by raising selling prices at a solid pace.
Business confidence climbed to an eight-month high, supported by expansion plans, new product launches, and expectations of stronger consumer spending in the year ahead.
The broader S&P Global Japan Composite PMI, which includes manufacturing, fell to 51.3 in September from 52.0 in August, showing the slowest growth since May. Services growth was offset by a steeper decline in factory output.
At the composite level, new business rose only marginally, while foreign demand fell for the sixth straight month. Employment, however, reached a three-month high, driven by service-sector hiring.
