Econintersect: The Japanese economy continues to struggle with the burden of the increase of 3% in the consumption tax effective 01 April. But the results of the struggle are continuing to show continuing slow improvement. After being slammed to a value of 46 in April by the onslaught of effects from the tax hike, the Service Sector PMI rose for the fourth consecutive month and entered expansion for the first time since March with a reading of 50.4. This was up from June’s 49.0.
Amy Brownbill, Economist at Markit, which compiles the survey, commented on the latest data:
“Latest data signalled improved business conditions for Japanese services in July, with output returning to growth territory for the first time in four months and new orders growing at a modest pace for the second month running.
Moreover, payroll numbers rose from a previous month of decline. Nonetheless, there is still room for improvement as rates of growth were marginal as the impact of the sales tax continues to have a lingering effect on the Japanese economy.”
- Business conditions in Japanese servic sector improve in July (Press release, Markit, 05 August 2014)