Pandemic Prods Japanese Firms To Plan Biggest Capex Cuts In Decade

Manufacturers expect to reduce capital expenditure by 4.5% compared with a year earlier, while non-manufacturers plan a 8.1% reduction, the survey showed, suggesting that slumping profits were denting spending appetite across industries.

Companies expect sales to fall 6.8% in the current fiscal year, more than a 5.2% drop projected three months ago and the biggest decline since 2010.

They expect recurring profits to plunge 23.2%, the fastest pace of decline since 2009, with automakers and service-sector firms among those hit hardest by the crisis.

Japan suffered its worst postwar economic contraction in the second quarter as COVID-19 hit businesses. Analysts expect only a modest rebound in the current quarter.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor