Corporate capital investment logged a year-on-year rise of 6.4 percent in the April-June period, marking the first increase in seven quarters, the Finance Ministry said Thursday.
This improvement in the quarterly corporate survey can be attributed to a rosier global economic outlook, thanks to the recent U.S. stock market upswing, the ministry officials said.
Receding fears over severe acute respiratory syndrome in other Asian countries also prompted Japanese firms to increase their investments in plant and equipment, they added.
The investment figures exclude software data.
The 6.4 percent rise in the April-June period followed a 3 percent drop in the previous quarter.
Combined sales of companies capitalized at 10 million yen or more, excluding financial institutions, also reached positive territory for the first time in eight quarters.
Sales rose 2.4 percent in the reporting period, against a 1.4 percent drop in the previous quarter, according to the survey.
The companies’ combined pretax profits surged 13.6 percent in the April-June period, marking the fourth consecutive quarter of increase, it said.
This earnings growth indicates that companies have reduced their manufacturing costs by importing cheaper materials from overseas and have limited labor costs by cutting their workforces while hiring more part-timers, the officials said.
The survey for the April-June period covered 25,151 companies, 77.6 percent of which submitted valid responses.
For fiscal 2002, the survey showed that companies were still cautious about capital investment. Investment was 18.5 percent lower than the previous year, marking the second straight year of decline.
Sales edged down 0.9 percent on a year-on-year basis, recovering from a 6.7 percent fall in the previous year.
Pretax profits rose 9.8 percent on a year-on-year basis, against a 21.2 percent tumble in the previous year.