Capital spending by the nation’s companies increased 3.1 percent in the April to June period from a year earlier, the 13th straight quarterly rise, as a firming yen continued to hurt corporate profits, government data showed Thursday.
Business investment by all nonfinancial sectors for purposes such as the building of factories and the purchasing of new equipment totaled ¥9.31 trillion, the Finance Ministry said.
Capital spending by manufacturers climbed 11.1 percent from a year earlier to ¥3.51 trillion, while business investment by the nonmanufacturing sector fell 1.3 percent to ¥5.81 trillion.
The data will affect revisions to the nation’s gross domestic product data for the same period, which will be released by the Cabinet Office on Sept. 8.
The pace of capital spending growth in the April-June quarter slowed from a 4.2 percent gain in the previous quarter. The government of Prime Minister Shinzo Abe sees private-sector capital investment as key to shoring up the economy.
Pretax profits at businesses in all sectors covered in the poll fell 10.0 percent from a year earlier to ¥18.26 trillion, the third consecutive quarterly decline.
A preliminary GDP report released last month showed the economy grew an annualized 0.2 percent in real terms from the previous quarter, partly affected by weak corporate capital spending.
Within the GDP data, capital spending — which accounts for around 15 percent of the nation’s GDP — dropped 0.4 percent for the second straight quarterly contraction.
On a quarter-on-quarter basis, business investment, excluding spending on software, decreased 0.5 percent, the ministry said.