TOKYO, Reuters – Japan’s service sector contracted at its fastest rate in five months in January. This is a result of pressure being applied by a record number Omicron virus infections.

As a result, Omicron has caused an increase in COVID-19-related admissions in third-largest country.

The seasonally adjusted final au Jibun Bank Japan Services Purchasing Managers’ Index(PMI) dropped to 47.6 after the 52.1 flash reading and the 48.8 flash reading.

The survey revealed that this was the slowest decline in business activity in August and outstanding businesses saw the largest rate of drop in just four months.

The survey revealed that service firms saw their staffing decreases at the rapidest pace in twenty months, and they became less hopeful of increased activity over the following year. Positive sentiment reached a low of five months, according to the survey.

Sector input prices grew at an elevated rate, meaning that corporations are still feeling the effects of global raw material inflation on their profits.

Cost burdens in the private sector have increased.

According to Usamah Bhatti (economist at IHS Markit), the January survey was influenced by weakness in larger services.

“Total Business Activity fell to contraction territory in September after a nearly eight-year high of manufacturing output growth.

From December’s final figure of 52.5, the composite PMI which includes both manufacturing and service calculations, fell to 49.9 in January.