The au Jibun Bank Japan Services PMI was revised higher to 54.0 in February 2023 from preliminary estimates of 53.6.
The latest result followed a final 52.3 in the previous month and marked the sixth successive month of expansion and the fastest pace since June last year, amid a notably stronger rise in new business inflows, as the impact of the pandemic receded.
New business accelerated to a nine-month high, as both domestic and international demand rebounded, with new export orders rising at the second-strongest pace in over three years.
As a result, employment returned to expansion, as demand recovered.
On prices, input cost inflation eased for the first time in three months, while, output cost inflation rose for the tenth month running.
The au Jibun Bank Japan Composite PMI Output Index* rose from 50.7 in January to 51.1 in February, signalling a quicker expansion in private sector output.
Finally, business sentiment strengthened to a four-month high, amid hopes that the lifting of pandemic restrictions in China and an improving global economy would boost demand conditions.
Commenting on the latest survey results, Usamah Bhatti, Economist at S&P Global Market Intelligence, said: "The near-term outlook also looks positive as the expansion in demand contributed to the steepest rise in outstanding workloads in five-and-a-half years, while the 12-month outlook for activity strengthened to a four-month high."
"Japanese private sector firms remained strongly optimistic that activity would continue to expand over the coming 12 months as the persistent weights of the pandemic and inflation on the economy showed sustained signals of easing. As such, firms reported the strongest degree of confidence since last October, in line with S&P Global projections that have the Japanese economy growing 1.2% in 2023."
For further details see:
Japan services PMI revised upward amid a stronger rise in new business inflows as the jolt of pandemic subside