Leading corporate managers expect the nation’s gross domestic product to post zero growth in fiscal 2002, the Japan Business Federation (Nippon Keidanren) said Tuesday, quoting the results of a recent survey.

Some 142 top industrialists who also occupy various posts within the business lobby were surveyed in July and August.

This median forecast signifies an improvement from January, when the the industrialists forecast a shrinkage of 0.6 percent.

Despite the pickup in the median reading, a Nippon Keidanren official in charge of the survey said, “There are hardly any perceptions that the economy is following an upward path.”

On a median forecast basis, the industrialists also expect the current fiscal year to end up logging an unemployment rate of 5.6 percent, the poll shows.

Although this figure represents an improvement from the 6 percent recorded in the previous survey, it attests to a stubbornly harsh job environment.

Asked what the government should do to boost the anemic economy, the largest proportion of those polled voiced hope that it will cut back on the corporate income tax rate and provide tax breaks on capital spending on new equipment and factories, as well as on research and development activities.

Hint of optimism

The August survey of taxi drivers, restaurant owners and others on the front lines of the economy remained below the balance line of 50 for the 25th consecutive month in August, though it improved slightly for the first time in four readings.

In its report on the survey, the government was upbeat.

“Recovery moves in the economy are seen in some areas, according to the average assessment of economy watchers,” the Cabinet Office said, slightly upgrading its assessment from July.

In July, the so-called economy watchers’ views led the office to say Japan’s recovery was stalling.

The diffusion index of the observations of store clerks, shop owners and others improved 1.2 points over July to 43.6, as the hot summer lifted department store sales and leisure spending.

A reading of 50 indicates that the respondents generally believe the state of the economy is the same as it was three months earlier.

The Cabinet Office surveyed 2,050 workers across the nation, receiving responses from 1,822, or 88.9 percent of those polled.

The household spending index rose 1.9 points to 42.8, while the retailing index rose 1.6 points to 42.4 and the drinking and eating index climbed 2.1 points to 37.2.

c The index on employment rose 2.2 points to 48.2, largely due to increases in temporary job offers.

The index on corporate activity, however, fell 1.3 points to 44.3, with the index on manufacturer’s activity slumping 2.9 points to 44.4 and that for nonmanufacturers’ activity edging up 0.2 point to 44.

A Cabinet Office official said that few workers were concerned about the strong yen, but that many apparently feel production activities have slowed.

The index for economic conditions in the coming few months came to 46.1, up 1.2 points from July and below 50 for the 23rd consecutive month.

The outlook index on household spending rose 1.1 points to 45.4, while that on corporate activity rose 0.9 point to 46.9.

The index on employment was up 3.6 to 50, the first time the index has reached the key line since November 2000.

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