Japanese corporations intend to spend 7.7 percent less on plant and equipment investment in fiscal 1999 than compared with the year ended Wednesday, according to the results of a survey released Friday by the Industrial Bank of Japan.
In fiscal 1998 the firms surveyed spent 1.3 percent less on such investments on a year-on-year basis, marking the first drop in four years, the survey says.
The survey predicts the firms will invest less in equipment in fiscal 1999 as they continue to adjust their capital stock amid dismal economic projections. The 7.7 percent decline was the largest since fiscal 1970, when the IBJ began its survey under the current method.
The long-term credit bank asked its 2,751 major corporate clients to estimate their equipment investment in fiscal 1998 and plans for fiscal 1999. The results showed that the firms surveyed had spent an estimated 19.8 trillion yen in the business year that ended in March 31. Among them, manufacturers reduced investment by 8.7 percent, while electric power companies boosted capital investment by 5.3 percent.