The index gauging tertiary industry activity fell 2.5 percent in July from the previous month, marking its first drop in five months.

The index stood at a seasonally adjusted 105.6 against the 1995 base of 100, the Ministry of Economy, Trade and Industry said Wednesday in a preliminary report.

Lower-than-average summer temperatures reportedly helped drag tertiary activity into negative territory in the reporting month, a METI official said.

The index gauging activity at machinery equipment wholesalers fell 2.5 percent, while that for retailers of food and beverages declined 2.7 percent, amid sluggish sales of air conditioners and cold beverages such as beer, the official said.

The index measuring activity in the engineering sector plunged 41.3 percent in July, following sharp increases in May and June.

By contrast, the air passenger transport index rose 9 percent, while that for travel agencies climbed 8.4 percent, as the negative impact of the SARS outbreak and the Iraq war subsided.

The index for all industrial activity, a supply-side measure of economic growth, fell 1.5 percent to 101.1 in July, for its first decline in three months, the report says.

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