The private sector shows a mixed trend: services remain robust while manufacturing weakens, contributing to a cautious overall trajectory for the economy.

Services-led growth persists, but rising costs and cautious demand dynamics keep firms wary amid labor shortages and softer customer activity.

New orders slowed to a 16-month low, with foreign demand for services contracting for the fourth month in a row, signaling softer demand ahead.

Demand cooled despite ongoing services expansion, as new orders moderated and foreign demand weakened further.

Japan’s services sector expanded, but the pace of growth remained modest and foreign demand declined at a slower pace.

Japan’s composite PMI rose modestly in October, indicating overall private-sector expansion despite slower service momentum.

Services continued to drive growth, with a 53.1 reading in October, though the pace eased from September.

The broader picture shows services offsetting manufacturing weakness, supporting a net expansion in the private sector.

Business confidence cooled from a recent high, while employment rose gradually as firms filled roles and pursued expansion.

Despite positive sentiment, labor shortages and softer demand weighed on confidence about future growth.

Inflationary pressures intensified in October, with higher input costs and output charges driven by rising labor, materials, food, and fuel costs.

Cost pressures rose across the private sector, with both input costs and selling prices reaching four-month highs even as hiring grew only marginally.

Finance & Insurance topped growth within services, followed by Transport & Storage, highlighting the subsectors fueling activity.

October showed resilient services but lingering headwinds from weaker demand and higher inflation, underscoring the need to monitor key indicators to gauge the recovery.

Employment growth slowed to a modest pace, easing backlogs to the smallest rise in four months as firms pursued expansion.

Composite new business retreated for the first time since mid-2024, driven by a sharp drop in manufacturing orders and softer service sales.