Tokyo: Japan’s corporate capital investment fell for the first time in over four years during the most recent quarter, largely due to a cutback in spending in the leasing industry, a survey by the Ministry of Finance showed on 3 September.
The MOF’s quarterly survey showed that capital spending dropped 4.9% from a year ago during the April-June quarter to $100 billion, the lowest for corporate spending since the April-June 2005 period.
The decline was mostly due to a large drop in capital expenditure by the leasing industry. Spending in the sector fell 22% and accounted for half of a 13.1% decline in spending by non-manufacturing industries, according to the ministry.
Companies in the leasing industry cut back on their spending because a decline in the number of new contracts and higher leasing prices caused their profits to fall, reported Dow Jones Newswires, citing an unnamed ministry official.
Capital spending in manufacturing industries rose 11.7%, marking the third straight quarter of double-digit growth and the 17th consecutive quarter of expansion.
During the January-March period, capital expenditure in Japan rose 13.6%, profits gained 7.4% and sales increased 6.3%.