February 4, 2009 / 5:18 AM / 11 years ago

Japan Jan services PMI tumbles on weak demand

TOKYO, Feb 4 (Reuters) - Japan’s service sector activity fell for the 13th month in a row in January, a corporate survey showed on Wednesday, underscoring the deeper slip into recession of the world’s second-largest economy.

The Nomura Japan Services Purchasing Managers Index, a new monthly survey of business conditions in the tertiary sector, tumbled to 34.1 in January from 37.0 in December, marking the lowest level since the survey started with pilot polls in September 2007.

“The ongoing decline in the Nomura Japan Services PMI confirms the deterioration in economic activity has now spread to a wide range of industries,” said Minoru Nogimori, an economist at Nomura Securities.

Respondents, including hotels and restaurants, pointed to weakened demand from both businesses and households, said Markit, a financial information firm that compiles the survey.

The data lands in the wake of the Nomura/JMMA Japan PMI announced last week on the manufacturing sector, which contracted for an 11th straight month in January to a record low. [ID:nTKC003262]

Both surveys, whose indexes show a contraction in activity if the reading is below 50, are based on questionnaires sent to over 400 private-sector businesses.

The Composite Output Index, which combines the two surveys, declined to 30.1 in January from 33.1 in December.

In another sign that shock waves from the global financial crisis have ripped through the export-driven economy, a Reuters’ poll showed on Monday that Japan’s economy probably shrank 3.1 percent in the last three months of 2008, or an annualised 11.8 percent. [ID:nT303524]

That would be the country’s worst economic performance since the first three months of 1974, when the economy shrank 3.4 percent as Japan suffered due to a steep rise in oil prices. (Reporting by Yuzo Saeki; Editing by Brent Kininmont)

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