Corporations to invest 0.6 pc less in FY 1998: survey.
Japanese corporations are expected to spend an average of 0.6% less in fiscal 1998 than the previous year on facilities and equipment due to weak domestic private consumption and exports to Asia, according to a Nippon Credit Bank survey released Thursday.
The year-on-year drop is to follow the preceding fiscal year's average 0.8% decline in their combined capital outlays, the bank said.
The survey results have illuminated lingering caution among Japanese businesses on spending more money on facilities and equipment, the bank warned.
In the manufacturing sector, automakers and steelmakers have remained bullish in their capital spending projections for the fiscal year that began April 1, while electronics makers, paper/pulp makers and oil refiners plan to slash capital outlays, it noted.
As a result, manufacturers plan to spend on average 4.7% less in fiscal 1998 on new production facilities and equipment in a sharp turnaround from their 5.4% increase the previous year, it said.
The nonmanufacturing sector, however, stood in sharp contrast with the manufacturing sector by projecting an average 1.2% increase, it said.
Although real estate companies plan to slash capital outlays, the buoyant capital spending programs of electric power companies and leasing firms will more than offset the negative effects of the planned cutbacks in the real estate sector, it said.
Meanwhile, Japanese corporations -- be they in the manufacturing or nonmanufacturing sectors -- project a bullish 1.1% capital outlay increase for fiscal 1999, it said.
An official at the bank's research department linked the bullishness to ''expectations that the economy will move in the right direction as a result of pump-priming measures and policies Japan may take to stabilize the financial system.''
The survey was conducted in July of 1,262 companies.
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|Publication:||Japan Weekly Monitor|
|Date:||Aug 24, 1998|
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