Key points highlighted by Markit:
- Backlogs of work fall amid new order growth slowdown
- Firms continue to expand workforce numbers
- Output price inflation eases, despite quicker rise in costs
Joe Hayes, Economist at IHS Markit, which compiles the survey:
- The Japanese service sector continued along an expansionary path during May; however the pace of growth failed to improve on April's six-month high, rising to only a mild extent.
- There were worrying signs of deteriorating demand conditions, with new sales increasing at the softest rate in 20 months.
- In an effort to support business activity, firms began to clear their backlogs of work. Outstanding business decreased for the first time in five months during May.
- To the upside, there were mentions among panellists that the continued upturn in order books had encouraged them to raise prices. However, the rate of inflation was the weakest seen across the current ten-month bout of rising charges.
Earlier this month:
