The services sector in Japan continued to expand in February, and at a faster pace, the latest survey from S&P Global revealed on Wednesday with a services PMI score of 53.8.
That’s up from 53.7 in January, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.
Helping to lift business activity higher across Japan’s service sector was a sustained upturn in overall new business. Notably, the rate of new order growth was the most pronounced since April 2024. Firms often commented that an improvement in demand conditions and new client wins had pushed up sales. Underlying data suggested the upturn was largely driven by stronger domestic demand, as new work from abroad rose at a weaker and only marginal rate.
The survey also showed that the composite index improved to 53.9 in February from 53.1 in January.
Underlying data showed that a further solid gain in service sector activity was accompanied by a notably quicker rise in factory output. Composite new orders also expanded at the strongest rate in 33 months, with both manufacturers and service providers seeing solid rates of sales growth. Overall new export business meanwhile rose at the fastest pace in eight years, largely due to an improvement in external demand for manufactured goods.
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