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Capital spending by major Japanese companies is expected to rise 5.2 percent in fiscal 2000 from a year earlier, the first increase in four years, a government advisory panel said Friday.

“It is expected that capital investment will improve gradually in fiscal 2000,” said a subcommittee of the Industrial Structure Council that advises the minister of international trade and industry.

The panel sent questionnaires to 2,056 manufacturers and nonmanufacturers capitalized at 100 million yen or more and fall under the ministry’s responsibility. Of these, 1,251 firms responded.

Capital spending by manufacturers is projected to rise 6.6 percent, while that by nonmanufacturers will increase 4.4 percent, the panel said.

The survey, however, excluded telecommunications, real estate and construction industries.

If the survey included those three industries, then the expectation would be that capital investment would grow 3.6 percent in fiscal 2000, the subcommittee said.

As for fiscal 1999, corporate investment in facilities and equipment fell 5.5 percent from the previous year for the third consecutive year of decline.

The survey shows investment in the current fiscal year will be boosted by information technology.

By industry, capital investment by the chemical industry in fiscal 2000 is expected to rise 2.3 percent, partly because of brisk demand for materials used to manufacture IT-related products.

Capital spending by the paper and pulp industry is expected to rise 25.2 percent because advances in IT are increasing demand for paper.

Investment by electronics makers is forecast to grow 22.7 percent, while that by manufacturers of general machinery, which includes such products as semiconductor manufacturing equipment, is projected to increase 13 percent

Capital investment by steelmakers, however, is projected to fall 20.9 percent, while that by oil refiners is tipped to decrease 17.8 percent.

As for nonmanufacturers, capital spending by retailers and wholesalers is expected to rise 21.3 percent because convenience stores are actively opening new outlets.

Tokai sees growth

NAGOYA (Kyodo) The economy will grow a real 1.8 percent in fiscal 2000, buoyed by a recovery in capital spending and expanding personal consumption, Tokai Bank said Friday.

Growth in investment in plant and equipment, led by manufacturers, is expected to turn positive, and personal consumption will gain momentum, the bank said in a report.

“While public-sector expenditure will slow, characteristics of a private sector-led self-sustained recovery will become apparent” in fiscal 2000, the bank said.

In fiscal 2001, gross domestic product will grow a real 1.5 percent, slowing slightly due to the expected slowdown of the U.S. economy and manufacturers’ businesses in Japan, the bank said.

“The economic recovery is still weak. It is necessary to help create new businesses through revitalization of small and medium-size companies and deregulation,” the bank said.

The bank made the projections on the assumption that the dollar will be quoted at an average of 106.50 yen in fiscal 2000 and an average of 105 yen in fiscal 2001.