Capital spending plummets 9.8%

Kyodo

Capital spending by firms fell 9.8 percent in the three months through September for the second straight quarterly fall amid uncertain prospects for the economy, the government said Friday.

Third-quarter business investment by all industries, excluding the financial and insurance sectors, for such purposes as building new facilities and introducing equipment, stood at ¥8.62 trillion, the Finance Ministry said. On a quarterly basis, the spending slowed a seasonally adjusted 2.7 percent from the April-June period.

The result is a key component for the government to revise gross domestic product figures in the third quarter, with analysts mixed, pointing to possible upward and downward revisions. Revised data will be released Dec. 9.

Capital spending among manufactures fell 1.6 percent, led by food processors and carmakers among other industries. Steelmakers noted uncertainty surrounding the outlook for demand for their products.

Nonmanufacturers logged a 14.3 percent decrease. Wholesalers and retailers as well as the transport and construction sectors were major decliners.

In a positive note, heavy machinery makers boosted their investment thanks to growing demand for equipment to remove debris caused by the March 11 disasters, the ministry said. Metal product makers also bucked the downtrend, supported by demand for auto parts, a sign of recovery in output by carmakers.

The ministry received valid survey responses from 22,666 companies capitalized at ¥10 million or more.