Japan’s tertiary industry activity index rose during the April-June quarter to its highest level in four years, the government said Friday, reinforcing the view that the country’s economic recovery has taken root among nonmanufacturers.
The index for the quarter rose 1.6 percent from the previous quarter to a seasonally adjusted 104.3 against the base of 100 for 2000, the Ministry of Economy, Trade and Industry said in a report. It was the biggest quarterly gain since 1.3 percent in the same quarter of 2000.
The index of all industrial activity, a supply-side gauge of economic growth, came to a seasonally adjusted 102.3, up 1.8 percent, and the highest level in four years, according to the report.
The service, financial services and insurance, telecommunications and real estate sectors led the rise in the tertiary industry activity index for the quarter.
Of the 11 sectors the report covered, the indexes rose in all but fell in the transport sector.
Among the winners, the index for the financial services and insurance sector climbed 3.5 percent from the previous quarter due to increases in brokerage commissions on firmness in Japanese stock prices.
Private-sector economists said they see an uptrend in the service sector, which shows that economic recovery is propelled by firm domestic demand along with brisk exports to China and other Asian economies.
“The strong reading shows the economic recovery — sparked by manufacturers — has broadened to involve nonmanufacturers,” said Mamoru Yamazaki, chief economist at Barclays Capital Japan Ltd.
“The latest data partially reflect surging electricity use during the very hot summer and growing sales of digital-related products, but we can clearly see that nonmanufacturers have posted rises in revenues in line with pickups in domestic demand.”
In June, the tertiary industry activity index rose 0.8 percent from May to a seasonally adjusted 104.4, rebounding from a 1.1 percent fall the previous month.
The index of all industrial activity came to a seasonally adjusted 102.4 for June, up 0.6 percent from the previous month. It eased 0.8 percent in May.
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