Japan service sector growth slows to 11-month low in April: PMI

[TOKYO] Japan’s service activity grew at its slowest pace in 11 months in April, as uncertainty and rising costs from the war in the Middle East weighed on sentiment, a private-sector survey showed on Friday (May 8).

The final S&P Global Japan Services Purchasing Managers’ Index (PMI) slipped to 51 in April from 53.4 in March, the slowest growth since May last year. A reading above 50 indicates expansion, while below that level signals contraction.

New orders increased at the slowest pace since last October, while new export business fell for the first time in five months as firms cited high prices and uncertainty related to the Middle East war.

Input costs rose at the sharpest rate in 12 months, with firms citing fuel, raw materials and staffing, while output charges increased at the third-steepest pace since the survey began in September 2007 as companies sought to pass higher costs on to customers.

Annabel Fiddes, economics associate director at S&P Global Market Intelligence, said: “The business mood continued to be dampened by lingering uncertainty over the war and the possibility of future price hikes and softer customer demand. Notably, optimism around the year-ahead slipped to the lowest since the Covid-19 pandemic in August 2020.”

Employment rose for an eighth straight month, but the pace of hiring was modest and little changed from March. Backlogs increased only marginally, with the rate of accumulation the softest since March 2025. REUTERS