Business / Economy

Big firms maintain positive outlook for third straight quarter, survey shows

JIJI

Major companies offered positive views of their operations for the January-March period, maintaining rosy outlooks for the third quarter in a row, a government survey showed Monday.

Business sentiment has been improving in both manufacturing and nonmanufacturing sectors, analysts said.

According to the joint survey by the Finance Ministry and the Cabinet Office, the business outlook index for companies with capital of ¥1 billion or more stood at plus 3.3 for the first three months of 2018, although it weakened from the previous quarter’s plus 6.2.

The outlook index was plus 0.3 for April-June and plus 5.8 for the following quarter.

Those positive readings “reflect the overall economy’s recovery trend,” a Finance Ministry official said.

The index represents the percentage of companies expecting to see their business conditions improve from the previous quarter minus that of firms feeling the opposite. The latest survey was conducted on Feb. 15.

The January-March outlook index for major manufacturers was plus 2.9, down from plus 9.7. Among them, makers of construction equipment and automation systems became more highly confident in their operations thanks to labor shortages.

The major nonmanufacturers’ index stood at plus 3.4, down from plus 4.5. Sentiment at general contractors improved due to brisk demand for urban redevelopment.

The survey also showed that sales at all companies in the country, excluding financial institutions and insurers, in fiscal 2017 — which ends on March 31 — are projected to grow 2.7 percent from the previous year. Their combined recurring profit and capital spending are estimated to expand 5.2 percent and 5 percent, respectively.

In fiscal 2018, the overall sales are seen to rise 1.5 percent. However, sharp rises in material and personnel costs are expected to push down the combined profit by 1.2 percent.