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Japan’s services sector shrank slightly in February as staffing levels grew despite output rising at the slowest rate in four months.
The Nikkei/Markit services purchasing managers’ index for February slipped to 51.3, its lowest level since October and down from 51.9 in January, but remained above the 50-point line separating expansion from contraction.
A higher quantity of new projects saw the country’s service sector increase staffing levels at the fastest pace since May 2013, the survey found. Input costs continued to rise in the service sector on higher fuel prices in February, although this eased from last month’s 28-month high.
Samual Agass, economist at IHS Markit said:
New business growth was also robust and continued to outstrip the historical average but this could only contribute to a fractional accumulation in backlogs of work. The overall expansion in Japan’s private sector remained relatively moderate, despite output growth in the manufacturing sector hitting a near three-year high
The composite PMI compiled by Nikkei edged down to 52.2 in February from 52.3 in January.