Combined capital investments by Japanese firms in the October-December period fell 18.7 percent from a year earlier, the worst drop seen since the same quarter of 1962, the Finance Ministry said Wednesday.
The fall marks the fourth consecutive quarter of year-on-year decrease in capital investments, according to the ministry's quarterly corporate statistics. "The sense of excess capacity is rising in all business sectors," a ministry official said.
Capital investments of nonmanufacturers fell 20 percent while those of manufacturers fell 15.9 percent. By sector, real estate firms made 29.2 percent fewer investments than a year earlier, and wholesalers and retailers invested 27.5 percent less.
Small businesses, with capital less than 100 million yen, posted a sharper decline than larger businesses. The ministry's survey also shows combined revenues fell 4.9 percent, marking the sixth consecutive quarter of decline. All sectors but producers of nonelectric machinery suffered drops in sales.
Combined pretax profits were also down by 24 percent in the same period for the fifth consecutive quarter. In particular, pretax profits of manufacturers plunged 42.5 percent, the worst since the April-June period of 1975, the official said.