Many major Japanese companies, especially manufacturing firms, saw sales increases and net profits in fiscal 2000, which ended March 31, 2001.

Shinko Research Institute Co. reported that 72.7 percent of 944 companies listed on the Tokyo Stock Exchange’s first section, excluding financial firms, saw sales growth for fiscal 2000.

Sales at these companies increased an average 4.4 percentage points over the previous year, while net profits jumped 179.1 percent on average over the year before, according to a Shinko Research survey.

“Generally speaking, the business performance of companies listed on the first section of the Tokyo Stock Exchange was very good in fiscal 2000,” said Yoshifumi Yasuda, manager of Shinko Research’s economic research section. “The (information technology) business, including telecommunications, played a locomotive role in such strong performance for the first half of the fiscal year.”

The manufacturing industry increased pretax profits by 50 percent over the previous year. Companies in such categories as electric appliances, machinery, iron and pulp contributed to the high growth.

The uptrend is largely the result of restructuring, growth in the telecommunications industry and the steady increase of exports to other Asian nations, Yasuda explained. Strength in the U.S. economy also was a major factor behind the growth of Japanese economy in the first half of fiscal 2000.

In addition, large special losses in fiscal 1999 caused by the early introduction of an accounting-standard change regarding retirement-allowance payments caused some companies to record increased net profits in fiscal 2000.

However, “Economic growth has lost its momentum since the latter half of fiscal 2000. The nation’s demand for goods has been shrinking and many companies cannot conduct further restructuring,” said Yasuda.

According to Shinko Research, 932 of the companies it surveyed said they expect to record 3 percent sales increases, 0.7 percent ordinary income growth and 38.6 percent net income increases in fiscal 2001.

Yet the institute believes that business results for fiscal 2001 will fall short of the companies’ estimates because of low investment in the IT industry, an overall decline in exports, ongoing deflation in Japan and slack consumer consumption.

These negative factors will have more of an influence on companies in the manufacturing industry than those in other industries, according to the research institute.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.