Japanese business activity growth softened to a four-month low in September as manufacturing and services decelerated amid inflationary pressures and weak domestic demand, according to preliminary data from S&P Global published Thursday.
The seasonally adjusted S&P Global Flash Japan Manufacturing Purchasing Managers' Index fell to 54.1 from 54.9 in the previous month and missed an estimate of 55 compiled by Investing.com. A reading of above 50 signifies an expansion in activity, while a reading of below 50 indicates a contraction.
Japanese firms saw a slower rise in overall new work in September due to cooling domestic demand across the manufacturing and service sectors, S&P said.
Private sector costs stayed sharp despite a four-month low in input cost inflation, largely driven by rising prices of energy and raw materials due to continuing tensions in the Middle East, as well as increases in staff and transport expenses, S&P said.
Services activity expanded more slowly to 51.6 in September from 52.5 in August amid slower growth in output and new orders. Demand from overseas clients also declined further, S&P said.
The headline seasonally adjusted S&P Global Flash Japan PMI Composite Output Index was 52.5, compared with 53.5 in August.
Job creation rose at its fastest pace since February, while overall business confidence strengthened to a seven-month high.
