Jibun Bank Services PMI

What is Jibun Bank Services PMI?

The au Jibun Bank Japan Services PMI (Purchasing Managers' Index) tracks month-on-month change in Japanese service activity. S&P Global compiles it, while au Jibun Bank only funds and brands it. It runs monthly since September 2007 as part of surveys across more than 40 countries.

It covers about 400 private firms across consumer services excluding retail plus transport, information, communication, finance, insurance, real estate and business services. Its headline, the Services Business Activity Index, tracks activity volume, where above 50 means broad monthly growth and below 50 means broad decline. It does not cover manufacturing, retail, public services, output levels or yearly growth.

When is it released and what happens each release?

The survey runs monthly, with responses collected in the 2nd half of each month and results embargoed until 09:30 JST (00:30 UTC). A flash estimate appears around the 22nd to 24th, about 1 week before finals, with manufacturing finals around the 1st working day after. Services and composite finals follow around the 3rd working day, with the Composite Output Index, manufacturing indexes, variable tables, commentary and charts. Flash uses about 80% to 90% of responses so finals can differ; underlying answers never revise, only seasonal factors do.

What moves Jibun Bank Services PMI?

The headline has no weighted parts, since it comes from one question. The indexes below only add context.

• New business: Total new order inflows, a demand gauge.

• New export business: Foreign demand for Japanese services, including inbound tourism.

• Outstanding business: Backlogs of unfinished work, showing capacity strain.

• Employment: Staffing levels and hiring.

• Prices: Input prices and prices charged, tracking operating costs and pass-through to selling prices.

• Future activity: Expected activity over the coming 12 months, a confidence gauge.

The May 2023 final release, published June 5, 2023, set a series record of 55.9, up from 55.4, on the strongest new business rise. New export orders grew at an unprecedented rate on inbound tourism after remaining pandemic curbs ended, while backlogs hit a series record. Hiring ran near record pace as input inflation eased to joint-softest in 14 months, while selling prices rose for a 13th straight month. The outlook stayed strong as the composite reached 54.3 from 52.9, its 2nd strongest behind October 2013, while manufacturing returned to growth after 11 months.

How is Jibun Bank Services PMI calculated?

1. Survey: S&P Global sends monthly questionnaires to about 400 service firms and collects answers in the 2nd half of the month. Each firm reports whether conditions are higher, unchanged or lower than the previous month.

1. Diffusion index: For each variable, the index equals the share answering higher plus half the share answering unchanged. Scores run from 0 to 100.

1. Seasonal adjustment: Each index is seasonally adjusted to remove normal seasonal patterns. An illustrative example: 45% higher and 35% unchanged gives 45 plus 17.5, or 62.5, then about 62.3 after adjustment.

1. Headline: The headline is the adjusted Business Activity Index alone, a 1-question gauge on activity volume. A 62.3, for illustration, means broad expansion, stronger in breadth than 55.0.

1. Composite and flash: The Composite Output Index blends manufacturing output and service activity by GDP weights reflecting their shares of output. For illustration, output of 49.0 with a 0.3 weight and services of 62.3 with 0.7 gives about 58.3. Flash repeats these steps on about 80% to 90% of replies about 1 week early, with finals using full replies.

1. Revisions: Underlying answers never revise after release; only seasonal factors may later revise the adjusted history. Flash is not revised; the final simply replaces it using all replies.

Key point: The Services PMI is a 1-question gauge, not a weighted mix like the manufacturing headline, so never compare the two directly. A 55.9 means broad monthly improvement, not 5.9% more output, and S&P Global compiles the survey while au Jibun Bank only sponsors it.