Big firms’ sentiment turns negative for 1st time in year

Jiji PressTOKYO (Jiji Press) — Business sentiment among major Japanese companies in April-June turned negative for the first time in a year, with both manufacturers and non-manufacturers showing deterioration, a government survey found Tuesday.

The business sentiment index for companies with capital of ¥1 billion or more fell to minus 2.0 from plus 3.3 for the previous quarter, according to the joint survey by the Finance Ministry and the Cabinet Office as of May 15.

But after seasonal adjustment, the index stood at plus 2.5, the ministry said, adding that the survey results reflect the economy’s mild recovery trend. The ministry discloses seasonally adjusted data for reference.

The survey’s index represents the percentage of companies seeing their business conditions improve from the previous quarter minus that of firms feeling the opposite.

The index for major manufacturers worsened to minus 3.2 from plus 2.9, pushed down by higher procurement costs for automobile parts, a decrease in demand for smartphone parts and other factors.

Big non-manufacturers’ index slid to minus 1.4 from plus 3.4, mainly due to a drop in profits stemming from rising material and labor costs in the construction industry.

The business outlook index for all major companies stood at plus 6.9 for July-September and plus 7.9 for the following quarter.

In April-June, the index came to minus 1.0 for midsize companies with capital of ¥100 million to less than ¥1 billion, and minus 10.6 for small companies with capital of ¥10 million to less than ¥100 million.

The survey also showed that combined sales at all surveyed companies in fiscal 2018 are projected to grow 2.1 percent from the previous year.Speech

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