Capital spending in the July-September period rose on a year-on-year basis for the second quarter in a row, although the pace of expansion slowed to 0.4 percent, according to a Finance Ministry survey released Thursday.
The quarterly growth was much slower than the 6.4 percent April-June rise, although it was an improvement from the 3.0 percent January-March fall.
The ministry attributed the slower expansion partly to a fall in capital spending in the real estate sector.
"Until the previous quarter, redevelopment projects in central Tokyo have supported spending in the real estate industry," a ministry official said. "But the momentum appears to have been lost following their completion."
The series of major redevelopment projects include the Roppongi Hills complex, which features high-rise apartments, a mall and a multiplex movie theater.
The data is from a survey of capital spending, excluding investment for software, by randomly selected companies capitalized at 10 million yen or more. A total of 19,268 firms took part.
Spending on plant and equipment by manufacturers rose for the second quarter in a row in the July-September period, up 7.7 percent from a year earlier, led by a 55.7 percent increase in the metal products industry.
But capital spending by nonmanufacturers fell 3.1 percent, down for the first time in two quarters, due partly to the 12 percent decrease in the real estate industry, the survey showed.
On a seasonally adjusted basis, capital investment covering all industries fell 3.8 percent, the biggest drop since October-December 2001, when it fell 8.5 percent.