Japanese Firms' Spending Plans Up 6.7% This Fiscal Year - METI
Monday July 7, 4:51 am ET
Dow Jones Business News
TOKYO -(Dow Jones)- Japanese companies plan to increase capital expenditures by 6.7% on year this fiscal year through March 2004, a government poll showed Monday, in another sign business sentiment in Japan is improving.
This would mark the first rise in firms' planned capital expenditure in two years. Companies cut investment 9.8% in the fiscal ended March 31 and reduced such outlays 1.4% the year before.
Manufacturers plan to spend 17.1% more on plant and equipment this fiscal year, while non-manufacturers project a 1.5% rise, according to the annual survey carried out by Japan's Ministry of Economy, Trade and Industry.
The figures are largely in line with last week's Bank of Japan tankan survey, in which large companies said they planned to boost capital expenditure by 4.9% on average this fiscal year.
The METI survey said manufacturers in all industries plan to raise spending this fiscal year, with steel and nonferrous metal makers expecting expenditures to be 33.0% and 43.3% higher, respectively, than last year.
Automobile makers plan to increase outlays by 24.3% this fiscal year, while electronic machinery makers plan to boost spending 20.1%.
Non-manufacturers appeared less optimistic about business conditions, with fitness-related firms planning to slash capital spending by 90.4%, the biggest such cut among non-manufacturers. Heat suppliers and holiday resort developers were the most upbeat, expecting increases of 144.1% and 51.0% respectively.
The ratio of spending on upgrading or maintaining plant and equipment to total expenditure rose to 23.6% this year from 21.9% last year, the survey showed.
Companies plan to keep the ratio of expenditure on increasing production unchanged at 43.2%, and raise research and development expenses to 5.9% of the total from 5.0% last year.
Information technology-related spending is also forecast to rise 13.3% in fiscal 2003, compared with a fall of 22.5% last year.
The survey covered 2,204 companies with capital of more than Y100 million and had a response rate of 60.9%.
-By Joseph Quini, Dow Jones Newswires; 813-5255-2929; joseph.quini@dowjones.com
-Edited by Hugh Lawson
