Japan’s Tertiary Sector Surges: 0.9% Monthly Gain Defies Expectations

James Hyerczyk
Updated: Sep 15, 2023, 14:16 GMT+00:00

Tertiary industry defies expectations, with July 2023 showing a remarkable 2.7% year-on-year growth, indicating a robust recovery.

Japan Tertiary Industry Activity


  • July 2023: Tertiary sector soars with 2.7% year-on-year growth.
  • Monthly surprise: 0.9% increase exceeds expectations.
  • Personal and Business Services drive sector revival.

Tertiary Industry Activity Shows Strong Resurgence in July 2023

In the most recent report on Indices of Tertiary Industry Activity, published on September 15, 2023, the tertiary sector continues to exhibit remarkable resilience and growth. With a 2015 average set at 100, this vital economic indicator reveals promising insights into the health of service-based industries. Here are the key takeaways.

Impressive Monthly Gains

July 2023 witnessed significant upswings in the tertiary sector, with the seasonally adjusted index climbing to 101.8, marking an impressive 0.9% increase from the previous month. This was better than the 0.2% forecast and well-above June’s revised -0.7%. The original index, equally robust, stood at 101.4, signifying an even more remarkable 2.7% year-on-year growth. These numbers reflect a sector not only bouncing back but thriving amidst dynamic economic conditions.

Personal and Business Services Lead the Charge

Within the tertiary sector, Broad-ranging Personal Services and Broad-ranging Business Services played pivotal roles. Personal Services saw a modest 0.3% monthly increase, reaching an index of 101.5, and a 2.6% annual growth. Simultaneously, Business Services soared with an index of 102.2, marking an impressive 1.5% monthly surge, and an equally substantial 2.6% year-on-year rise. This indicates that both consumer-centric and professional services continue to flourish, driven by evolving consumer needs and business demands.

Driving Forces Behind the Surge

A closer look at the industries contributing to these positive changes reveals some noteworthy trends. Transport and Postal Activities, particularly Road Freight Transport, played a significant role, with a 6.9% monthly increase and a 5.7% year-on-year growth. Retail Trade, Electricity, Gas, Heat Supply, and Water, Real Estate, Finance and Insurance, and Living and Amusement-related Services also contributed positively, underscoring the breadth of the sector’s recovery.

Challenges in Certain Sectors

While the overall outlook is optimistic, some sectors faced challenges. Business-related Services saw a minor dip of -0.8% monthly, primarily due to changes in Technical Services and Employment and Worker Dispatching Services. Additionally, Medical, Health Care, and Welfare, as well as Information and Communications, experienced slight declines. Goods Rental and Leasing remained flat, and this segment faces a year-on-year decrease of -1.4%.

Short-term Outlook: Bullish

In the short term, the tertiary sector is expected to remain bullish. The notable growth across various industries, coupled with increasing consumer and business confidence, suggests continued expansion. While challenges persist in specific sectors, the overall trajectory is one of recovery and progress. July’s positive performance affirms the resilience of the tertiary industry in navigating the ever-evolving economic landscape.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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