TOKYO -- Japan's service sector growth slowed down in December with a weaker rise in new sales dampening output growth.
The Nikkei Japan Services Purchasing Manager's Index, or PMI, recorded a three month low of 51.0 in December, down from last month's 52.3. Unfavorable weather conditions as well as underwhelming sales at companies put downward pressure on activity growth.
A reading above 50 indicates economic expansion, while a reading below 50 points toward contraction.
Joe Hayes, economist at IHS Markit, which compiles the survey, said "positive survey data from the manufacturing sector were not mirrored by Japan's dominant service-providing industry in December, where business activity increased at the weakest pace since May if the natural-disaster-hit September is discounted."
He added ""nonetheless, composite level data points to a relatively solid pace of expansion over the last three months of 2018, suggesting that the Q4 GDP print should bring a bounce-back in growth."
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