Japan’s Q1 capex falls for 4th straight quarter


Article content

TOKYO — Japanese companies cut spending on plant and equipment for the fourth consecutive quarter in January-March, as the economy struggles to shake off the drag from the coronavirus pandemic.

A slow recovery of firms’ propensity to spend is likely to worry policymakers hoping strong domestic demand can help make the country’s economic recovery more sustainable.

Ministry of Finance (MOF) data out on Tuesday showed capital expenditure in the first quarter fell 7.8% from the same period last year, pulled down by weaker investments in transportation equipment, electrical machinery and real estate.

It marked the fourth quarter of an annual decline in capital expenditure in a row, after posting a 4.8% contraction the final quarter of last year.

The world’s third-largest economy slumped back into decline in the first quarter as a slow vaccine rollout and repeated emergency curbs put in place to halt a resurgence of infections hurt domestic demand.

After bouncing from last year’s slump, driven by a strong recovery of exports, some analysts worry Japan’s economy could slip back into recession in the current quarter due to extended coronavirus curbs.

A preliminary estimate found Japan’s economy shrank an annualized 5.1% in the first quarter as households curtailed spending following a resurgence of infections and export growth slowed sharply.

Article content

The latest MOF survey showed manufacturers’ business spending fell 6.4% from a year earlier, while that of service-sector firms dropped 8.5%.

Tuesday’s data comes after weaker-than-expected factory output and retail sales figures showed that the economic recovery remained dependent on overseas demand.

Capital expenditure lost 0.4% in January-March from the previous quarter on a seasonally-adjusted basis, the MOF data showed.

Corporate recurring profits gained 26.0% in January-March from a year earlier, up for the first time in eight quarters, while sales were down for a seventh consecutive quarter, declining 3.0%. (Reporting by Daniel Leussink; Editing by Sam Holmes)



Source link

Latest

LJP implodes, five MPs oust Chirag Paswan as leader, elect Pashupati Kumar Paras

Five of the six Lok Janshakti Party MPs in Lok Sabha have joined hands against their leader Chirag Paswan and elected Pashupati Kumar...

S&P 500 teases record closing high as retail frenzy churns

Breadcrumb Trail Links PMN Business Author of the article: Article content NEW YORK...

ECB braced for split on implementing new strategy, Lagarde warns

European Central Bank unity on its new inflation target could dissolve into division as early as next week when policymakers meet to discuss changing...

Why Intraday Trading is Popular Amongst Stock Market Investors profits, Loss and Risk in 2022

Intraday trading has become increasingly popular amongst stock market investors in recent years. This type of trading allows investors to buy and sell stocks...