Japan's Q2 corporate capital spending down 1.7%

14:13, September 03, 2010      

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Japanese companies reduced capital spending across all industries in the April-June quarter by 1.7 percent from a year earlier, the Finance Ministry said in a report on Friday.

According to the ministry, the pace of decline slowed significantly from the 11.5 percent annual slump in the previous quarter, as nonmanufacturers spent more on equipment during the recording period.

The data revealed that manufacturers' spending on plant and equipment dropped 10.5 percent, while spending among nonmanufacturers climbed 3.4 percent.

The overall decline in the April-June quarter was less than a median forecast for a 6.5 percent decrease, economists noted

The amount of corporate capital spending is very much industry specific, with some of the most capital intensive industries include oil, telecom and utilities.

Capital spending in Japan has been decreasing for the last 3 years, although the pace of decline has eased over the last 3 quarters.

Corporate capital spending is a key gauge used by economists to calculate gross domestic product figures during the same period.

Japan's revised GDP figures will be released on Sept. 10.



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