Big firms’ biz sentiment sees improvement

Jiji Press

17:59 JST, December 12, 2022

TOKYO (Jiji Press) — Business sentiment among major Japanese companies improved in October-December, with the recovery led by nonmanufacturers, a government survey showed Monday.

The business sentiment index for companies with capital of ¥1 billion or more stood at plus 0.7, up from plus 0.4 for July-September, according to the joint survey by the Finance Ministry and the Cabinet Office. The index showed a positive reading for the second straight quarter.

Sentiment among nonmanufacturers improved on the back of the full lifting of COVID-19 movement restrictions, while sentiment among manufacturers deteriorated for the first time in two quarters due mainly to higher materials costs.

The latest survey was taken to gauge sentiment as of Nov. 15.

The sentiment 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 large nonmanufacturers improved to plus 2.7 from minus 0.2 in the previous survey, as sentiment recovered in the hotel and restaurant industries, which were aided by the government’s domestic tourism promotion campaign, and also in the transportation sector.

The index for large manufacturers came to minus 3.6, down from plus 1.7. Sentiment in the automobile industry was solid thanks to the easing of semiconductor shortages. But sentiment among chemical makers and information communications equipment manufacturers was dampened by rising materials prices and a slowdown in the Chinese economy.

The index for midsize companies, both for manufacturers and nonmanufacturers, stood at plus 4.7, up from minus 2.2, and that for small companies came to minus 6.0, up from minus 15.9.

The business outlook index for major companies stood at plus 1.8 for January-March next year and plus 0.8 for the following quarter.

Capital spending at all surveyed companies in fiscal 2022, which will end next March, are projected to rise 13.2% from the previous year, chiefly led by expenditures for digitalization.

“The latest survey reflected the state of the Japanese economy, which continues to pick up moderately,” a Finance Ministry official said, adding that a close watch is needed for the possible impact from rising prices and supply chain constraints.