Business confidence among large companies in Japan plummeted in the January-March quarter.
The Cabinet Office and Finance Ministry said Thursday in a joint quarterly survey that the index on business conditions at companies capitalized at 1 billion yen was 0.6, compared with 2.1 for the October-December quarter. Manufacturers were hit by higher raw material prices and inventory adjustments in the information technology sector.
In the previous survey, the latest index reading was forecast at 4.1.
The index is compiled by subtracting the percentage of companies that report deteriorating business conditions from the percentage of those that report an improvement.
The index for major manufacturers stood at minus 7.6, falling from minus 1.3.
The index for large manufacturers of electric machinery equipment dropped to minus 22.3 from minus 5.6 as IT-related companies moved to curb production while making inventory adjustments.
The index for major steelmakers plummeted to 0.0 from 22.7, weighed down by higher raw material prices, including iron ore.
Business sentiment among major nonmanufacturers showed improvement in the reporting quarter, with their index edging up to 5.5 from 4.1.
According to the survey, the business confidence index fell to minus 9.7 for midsize companies capitalized between 100 million yen and 1 billion yen, compared with minus 0.6 in the October-December quarter.
The index at small companies capitalized between 10 million yen and 100 million yen fell to minus 24.3 from minus 14.5.
The index readings for midsize and small companies also undershot the respective previous forecasts of minus 4.4 and minus 16.3, the latest survey said.
The survey was conducted on Feb. 25 and compiled results from 10,796 respondents.
Sales off 12th month
Sales at supermarkets dropped 7.1 percent in February from a year earlier to 1.041 trillion yen for the 12th straight month of decline on a same-store basis, the Japan Chain Stores Association said Thursday.
The fall reflects sluggish sales of seasonal nonfood items, including spring clothing, due to lower-than-usual temperatures in the reporting month, the association said in a preliminary report covering 8,579 stores operated by 97 supermarket chains.
The reporting month also had one less Sunday than February 2004, which worked to offset robust sales of heating equipment and blankets, the association said.
Department store sales dropped 7 percent to 522.7 billion yen in February on a same-store basis, for the first decrease in two months, the Japan Department Stores Association said the same day in a preliminary report covering 285 outlets run by 98 department store chains.
The association also cited the weather as a factor behind sluggish sales. Sales of men’s clothing fell 9.2 percent, following a 0.7 percent dip in January, due to poor sales of spring suits and coats. Sales of women’s clothing dropped 12.7 percent and those of children’s clothing 15.1 percent.
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