2012 capital spending by 100 major firms looks poised to rise 11.7%

JIJI

Combined capital expenditures planned by 100 major domestic companies in fiscal 2012, which began in April, is estimated to grow 11.7 percent from the previous year, the latest Jiji Press tally shows.

The estimate shows that many major companies now plan to increase capital spending after the lingering effects of the March 2011 earthquake and tsunami.

In fiscal 2011, which ended in March, their capital spending rose 6.4 percent from the previous year.

The tally covered the top 100 firms in terms of bourse capitalization that are listed on the Tokyo Stock Exchange’s first section and that close their books in March and have aired group capital spending plans.

Manufacturers accounted for over 70 percent of the total. Utilities, trading houses and some other firms were excluded.

Automakers have revealed aggressive capital expenditure plans.

After suffering weak production and sales in the previous year due to the disaster and massive flooding in Thailand, automakers now plan to boost production capacities as they expect strong demand in emerging economies and a recovery of the Japanese market thanks to the revival of subsidies for eco-friendly vehicles.

Honda Motor Co. will replace equipment at a flood-hit plant in Thailand and promote investment in a new Mexico plant. Honda plans to spend ¥580 billion in fiscal 2012, up from ¥406.5 billion the previous year.

Many manufacturers are meanwhile focusing their investment in emerging economies, mainly in Asia, as part of efforts to deal with the strong yen and benefit from demand abroad.