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Japanese corporate spend seen in record decline
2009-06-08
TOKYO (AFP) - Japanese companies will collectively cut their capital investment by 15.9 percent in the year to March 2010, representing the sharpest decline on record, according to a newspaper survey. Planned capital spending by 1,475 major firms for the year stood at 22.7 trillion yen (230.5 billion dollars), down 4.28 trillion yen from fiscal 2008, the Nikkei business daily said. It was the second straight year of decline and the biggest percentage decline since the newspaper began the twice-yearly survey in 1973. Japan Inc. has been hit hard by the global economic crisis, forcing blue-chip exporters to carry out aggressive cost cutting programmes, including massive layoffs and factory closures. The Nikkei said any delay in an economic recovery could lead to a third straight year of declines in capital spending for the first time since the early 1990s. Of the 17 manufacturing sectors in the survey, 15 were projected to cut investment this fiscal year, with only the food and pharmaceutical sectors planning to boost collective capital spending, the newspaper said. Non-manufacturers were curbing planned spending by 4.5 percent, it said. Industry leader Toyota Motor Corp. expects to cut investment by 470 billion yen to 830 billion yen while rival Honda Motor Co. is to slash spending by 200 billion yen to 390 billion yen. Electronics giant Hitachi Ltd. plans to cut back by more than 30 percent, while rival Toshiba Corp. is expected to reduce spending on its chip segment to less than 100 billion yen, down from 230 billion yen in fiscal 2008.
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