7 June 2001, 16:19 Japan's MoF says Q1 capex supported by machinery, auto sectors
TOKYO (AFX-ASIA) - A Ministry of Finance official said first
quarter to March capital expenditure remained solid, supported by
strong spending in the machinery and auto sectors and despite the fall
off in pretax profit growth.
The official said companies appeared to have continued their
earlier spending plans, despite the decline in exports, profitability
and sales seen from the end of last year.
The ministry earlier said non-financial firms' capex rose 2.5 pct
in the first quarter, compared with a rise of 7.1 the previous quarter,
while parent pretax profit was flat, against a rise of 31.9 pct in the
fourth quarter.
"Overall, it can be said that solid capex continued in the
quarter," he said.
"It is uncertain whether companies expected exports to slowdown in
the quarter," he said. "It seems to me that companies basically
proceeded with the capex plans that they decided some time ago."
The strong rise in capital expenditure growth in the electric
machinery sector decelerated only slightly in the first quarter,
showing growth of 30.4 pct year-on-year, compared with 31.6 pct in the
previous quarter.
The official attributed this to continued strong spending in the
microchip and liquid crystal display segments.
Capex in the general machinery sector rose 43.5 pct, against a fall
of 4.7 pct the previous quarter due to growth in spending on machinery
parts.
The auto sector saw capex rise 30.4 pct in the first quarter,
against a rise of 1.6 pct previously, due to some large-scale projects.
Non-manufacturing capex fell 5.8 pct, dragged down by weak
service-sector spending, which declined 14.3 pct against a fall of 3.9
pct the previous quarter, mainly due to the effect of a high base the
year before.
In 2000, first quarter service sector capex rose 32.7 pct.
The official said growth in pretax profit narrowed in the first
quarter due to a slowdown in sales as well as rising costs.
Pretax profit in the electric machinery sector fell 1.6 pct in the
quarter, against a rise of 74.0 pct previously, due to falling sales
and rising costs of parts.
Sales in the electric machinery segment decelerated to a rise of
0.4 pct, against 10.1 pct in the fourth quarter.
© 1999-2024 Forex EuroClub
All rights reserved