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ECONOMY

90% say Japanese economy is on “expansionary trend,” Sankei poll of 126 major companies

  • May 5, 2018
  • , Sankei , p. 6
  • JMH Translation

Companies are growing more confident about the economy. According to the Sankei Shimbun’s questionnaire survey taken of 126 major Japanese companies, some 90% of respondents said the current domestic economy is either “expanding” or “expanding moderately.” Corporate profits are at highest-ever levels, and this has led to a rise in business confidence. Moreover, about 80% of pollees said the economy will be “expanding” or “expanding slightly” in the second half of the year. Concerns persist, however, over the labor shortage and the impact of U.S. protectionist trade policies.

 

A total of 90% of companies surveyed said that the current economy is expanding, with 1% saying Japan’s economy is “expanding” and 89% of companies saying it is “expanding moderately” (figures exclude companies that did not answer the question). Some 10% said that the economy is “leveling off.” No companies said that the economy is in a “moderate recession” or “recession.”

 

Given multiple options and asked to select up to two as reasons for their response that the economy is “expanding” or “expanding moderately,” some 54 companies said “increase in corporate profits,” making it the most frequently given response. Listed companies are expected to post best-ever profits for the period ending March 31, 2018. Other responses were as follows: “improvement in the employment situation” (30 companies), “recovery in the overseas economy” (29 companies), and “recovery in personal consumption” (28 companies). Some 25 companies selected “other,” and many of these said “increase in capital investment” with a rise in their corporate profits.

 

Some 12 of the companies that thought the economy is leveling off gave as their reason “sluggish personal consumption.”

 

As for the outlook for the domestic economy in the second half of the year, more than 80% of respondents indicated the economy will be on an expansionary trend, with 2% saying “expanding” and 81% saying “expanding slightly.” Another 17% said the economy will be “leveling off.” No companies said that the economy will be in a “moderate recession” or “recession.” Compared to the assessment of the current economy, slightly more companies said the economy will be leveling off in the second half of the year. Nonetheless, the results suggest that corporate business sentiment is firm overall.

 

Given multiple options and asked to select up to two as reasons for their response that the economy will be “expanding” or “expanding moderately” in the second half of the year, some 36 companies said “increase in corporate profits,” making it the most frequently given response once again. Favorable business performance is bolstering economic sentiment. Other responses were as follows: “other” including increase in capital investment (35 companies), “recovery in personal consumption” (30 companies), and “recovery in the overseas economy” (28 companies).

 

Respondents were asked to write causes for concern about the domestic economy through the end of the year. Many pollees gave responses similar to a construction company which said “trade friction set off by the United States,” which is adopting more protectionist policies. If trade friction heats up between the United States and China, it could have a negative impact on the domestic economy as it will trigger a “slowdown in the world economy and major fluctuations in the exchange rate” because it will place downward pressure on the Chinese economy as exports become sluggish.

 

Moreover, concern persists over the labor shortage which is intensifying in some sectors. A trading company commented: “The labor shortage may restrict economic growth.” A retailer said, “Some companies are reviewing their operations because of the labor shortage.”

 

 

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