Big firms show positive biz outlook for 3rd straight quarter

March 12, 2018

Tokyo- Major Japanese companies offered positive views on their business operations for January-March, keeping rosy outlooks for three quarters in a row, a government survey showed Monday.

Business sentiment has been improving in both manufacturing and nonmanufacturing sectors, analysts said.

According to the joint survey by the Ministry of Finance and the Cabinet Office, the business outlook index for companies with capital of one billion yen or more stood at plus 3.3 for the first three months of 2018, although it weakened from the previous quarter's plus 6.2.

The outlook index came to plus 0.3 for April-June and plus 5.8 for the following quarter.

Those positive readings "reflect the overall economy's recovery trend," a MOF official said.

The index represents the percentage of companies seeing their business conditions improve from the previous quarter minus that of firms feeling the opposite. The latest survey was conducted on Feb. 15.

The January-March outlook index for major manufacturers was plus 2.9, down from plus 9.7. Among them, makers of construction equipment and automation systems grew highly confident in their operations thanks to labor shortages.

Major non-manufacturers' index stood at plus 3.4, weaker than plus 4.5. Sentiment at general contractors improved due to brisk demand for urban redevelopment.

The survey also showed that sales at all companies in the country, excluding financial institutions and insurers, in fiscal 2017 ending on March 31 are projected to grow 2.7 pct from the previous year. Their combined recurring profit and capital spending are estimated to expand 5.2 percent and 5.0 percent, respectively.

In fiscal 2018, the overall sales are seen to rise 1.5 percent. However, sharp rises in material and personnel costs are expected to push down the combined profit by 1.2 percent. Jiji Press