Japan Business Sentiment Index Down

June 14, 2017

The Japan Times reports:

The business sentiment index for companies with capital of ¥1 billion or more stood at minus 2.0, down from plus 1.3 for the previous quarter, according to the joint survey by the Finance Ministry and the Cabinet Office.

The index represents the percentage of companies seeing their business conditions improve from the previous quarter minus that of firms feeling the opposite.

“Compared with January-March, when recurring profits hit record highs, business sentiment weakened,” said an official of the Finance Ministry’s Policy Research Institute. “But the undertone (of the economy) is recovering moderately.”

By industry, the sentiment index deteriorated for automakers, which saw effects of last year’s new model launches diminish, and also for shipbuilders, which are faced with rising prices of steel and other materials.

In the non-manufacturing sector, the index fell for construction companies as they suffered a setback after completing a large number of projects in the previous quarter.

The business outlook index for all major companies stood at plus 7.1 for July-September and plus 6.7 for the following quarter.

In April-June, the index came to minus 3.1 for midsize companies with capital of ¥100 million to less than ¥1 billion, and minus 9.9 for small companies with capital of ¥10 million to less than ¥100 million.

In July-September, the index is expected to turn positive for midsize companies. For small companies, the index is projected to stay in negative territory both in the manufacturing and nonmanufacturing sectors.

The survey also showed that capital expenditures by all surveyed companies are estimated to increase 3.8 percent year on year in fiscal 2017. Their combined sales are projected to grow 2.1 percent while their recurring profits are forecast to fall 0.4 percent.

Source: The Japan times Online, 13 June 2017


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