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TOKYO,
March 4 (Reuters) - Japan's services sector expanded in February at its quickest pace in nearly two years, driven by a surge in business activity due to improving demand and acceleration in new work, a private survey showed on Wednesday.
* The S&P Global final Japan Services Purchasing Managers'Index (PMI) edged up to 53.8 in February from 53.7 in January,marking the 11th consecutive month of expansion. The rate ofexpansion was the best recorded since May 2024. * The pace of growth matched the level seen in May 2024.Readings above 50.0 indicate growth in activity, while thosebelow point to a contraction. * Growth was largely driven by new business, which hit itshighest since April 2024. The increase was mainly attributed tostronger domestic demand as overseas demand grew at a modestpace. * Annabel Fiddes, economics associate director at S&P GlobalMarket Intelligence, said: "Japan's service sector continued toexpand at a solid rate in February, with firms signalling thequickest rise in sales for nearly two years." * However, the rate of employment growth eased to athree-month low, though it remained above the long-term average.Some firms cited staff resignations and difficulties in fillingvacancies as challenges to employment growth. * Cost pressures intensified, with input prices risingsharply, prompting service providers to increase their sellingprices at the fastest rate since April 2014. * The broader picture for Japan's economy was also positive,with the Composite PMI, which includes both manufacturing andservices, climbing to 53.9 in February from 53.1 in January.This marks the fastest growth since May 2023, supported by again in the services sector and a rise in factory output.(Reporting by Kaori Kaneko; Editing by Jacqueline Wong)
