Services spending jumped to only 3% below its pre-virus level in Q4 2021 despite having begun the quarter on a weak footing with curfews still in place for bars and restaurants across many regions in October. It will have been knocked back again this quarter by the Omicron surge and lackadaisical booster rollout – former-vaccine chief Kono Taro claims the initial rollout was so slow because he wasn’t there “to whip” the health ministry into action. But with daily cases now falling and the booster rollout finally hitting PM Kishida’s one-million-a-day target, services consumption is well set for a springy bounce next quarter that will pick up where Q4 left off. That may put services spending to within touching distance of pre-virus levels far earlier than most had expected before the release of the preliminary Q4 GDP data last week. And if – as we expect – the Go To Travel discounts are restarted next quarter, then that would give a further boost to the hard-hit face-to-face services sector.
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