Japanese Service Industry Activity At 5-Month High
9/16/2009 11:45 PM ET
(RTTNews) -
Thursday, the Ministry of Economy, Trade & Industry announced that Japan's tertiary industry activity index, which is a measure of the total output produced by the nation's service sector, reached a 5-month high in July, offering further evidence that the world's second largest economy is on the recovery track. Furthermore, business conditions have improved markedly in the third quarter, a separate report released on the same day revealed.
The tertiary activity index advanced a seasonally adjusted 0.6% in July from the previous month to 96.7. The increase was slightly higher than economists' expectations for a 0.5% increase following the 0.2% monthly gain in June.
The rise in the index was driven by increased output from the wholesale & retail trade industry, which gained 3.2% month-on-month in July. Other industries that contributed to the increase included transport & postal activities, which increased 1.3%, and information & communications, up 1%. Miscellaneous services and accomodations, eating & drinking services were up 1.2% and 1%, respectively.
On the other hand, finance & insurance services fell 1.5% on month in July. Electricity, gas, heat supply & water services dropped 1%, and medical, healthcare & welfare services were down 0.4%.
Separately, the Ministry of Finance announced earlier in the day that the all-industries index for business conditions among large corporations having a capital of 1 billion yen or over posted a score of 0.3 in the third quarter, rising sharply from -22.4 in the previous quarter. The index is estimated to increase further to 4.9 in the fourth quarter.
The index measuring domestic economic conditions posted an index score of 0.7 in the third quarter, climbing from -26.7 in the previous quarter, while the employment index, although remaining in negative territory, moved up to -9.6 from -11.7.
Outlook among large manufacturers improved significantly in the quarter, with the corresponding index unexpectedly increasing to 15.5 in the third quarter compared to -13.2 in the second quarter. Economists had expected an index score of -11. Domestic economic conditions turned positive to 16.8 from -14.2, while the employment index rose to -18.9 from -28.3. Sentiment among large manufacturers is expected to moderate to 13.9 in the December quarter.
Also, the non manufacturing index improved to -8.6 in the third quarter from -27.8 in the previous quarter, with domestic economic conditions at -8.8, up from -33.9.
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