Capital spending up for 4th straight quarter

December 1, 2017

Tokyo- Japanese nonfinancial companies' combined capital expenditures grew for the fourth straight quarter in July-September, led by brisk spending by nonmanufacturers, government data showed Friday.

The sum rose 4.2 percent from a year before to 10,792 billion yen, the Finance Ministry said, beating the median forecast of a 3.5 percent increase among five economic research institutes surveyed by Jiji Press.

Spending by non-manufacturers increased 5.9 percent, driven by sharp growth at the services industry, in which some hotel operators boosted expenditures on fresh construction and renovation, as well as the goods rental and leasing industry.

Manufacturers' spending rose 1.4 percent on the back of brisk expenditures by electrical machinery makers to increase their capacity to make equipment for semiconductor makers.

Combined recurring profits rose 5.5 percent to 17,892.8 billion yen, hitting the highest level for July-September, thanks partly to strong sales of new vehicle models.

Manufacturers' profits jumped 44 percent, lifted by strong performance at the transportation machinery sector and the chemical industry, which enjoyed strong demand for medical products, as well as the production machinery sector.

Non-manufacturers posted a 9.5 percent profit decline, dampened by decreases at the services industry and the information and communications sector, which was hit by growing sales promotion costs amid intense competition.

Combined sales rose 4.8 percent to 338,699.9 billion yen, up for the fourth consecutive quarter.

The survey results showed a continued moderate recovery in the Japanese economy, a ministry official said.

The results will be reflected in revised July-September gross domestic product data to be released by the Cabinet Office on Dec. 8. Jiji Press