June 24, 2022
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Japan’s capital spending in the third quarter increases for the second quarter in a row

By on December 1, 2021 0
  • Q3 investments + 1.2% y / y, seasonally adjusted -2.6% qtr / qtr
  • Investments by manufacturers + 0.9% year / year, non-manufacturers + 1.4%
  • Ordinary profits + 35.1% year / year, sales + 4.6%

TOKYO, Dec. 1 (Reuters) – Japanese companies increased spending on factories and equipment for the second consecutive quarter in July-September, as business activity remained resilient to the blows of the pandemic, although the pace of gains slowed down.

A slow recovery in business spending is likely to worry policymakers who hope that strong domestic demand can make the country’s economic recovery more sustainable.

Data from the Ministry of Finance (MOF) released on Wednesday showed capital spending in the third quarter rose 1.2% from the same period last year.

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This is the second consecutive quarter of year-over-year gains, after recording a larger increase of 5.3% in the second quarter.

The data, which will be used to calculate the revised gross domestic products (GDP) expected next Wednesday, comes after industrial production growth in October, hinting at a recovery fueled by stronger auto production. Read more

The world’s third-largest economy declined in the third quarter as global supply disruptions hit exports and the health crisis shook consumer confidence.

A preliminary estimate found that the economy shrank 3.0% annualized in July-September amid a resurgence in coronavirus infections. Read more

Data on Wednesday showed that spending by businesses of manufacturers improved 0.9% from a year earlier, while that of businesses in the service sector rose 1.4%.

Capital spending, however, fell 2.6% in July-September from the previous quarter on a seasonally adjusted basis, MOF data showed.

Recurring business profits rose 35.1% in July-September from a year earlier, while sales were up 4.6%.

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Reporting by Daniel Leussink; Editing by Sam Holmes

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