December 3, 2018
By Tetsushi Kajimoto
TOKYO (Reuters) – Japanese corporate capital expenditure growth rose for an eighth consecutive quarter in July-September but the pace of gains slowed sharply, raising doubts about the strength of business activity amid global trade friction.
Ministry of Finance (MOF) data out on Monday showed capital expenditure grew 4.5 percent in July-September from the same period last year, led by chemicals, production machinery, information and communications. It slowed from a 12.8 percent gain in the previous quarter.
Excluding software, capital expenditure fell 4.0 percent in July-September from the previous quarter on a seasonally-adjusted basis, down for the first time in five quarters.
The data will be used to calculate revised gross domestic product figures due on Dec. 10.
Capital expenditure has been a bright spot in the world’s third largest economy, as companies refurbish their old equipment and boost investment in automation and labour-saving technology to cope with labor shortages in an aging society.
A preliminary estimate out last month showed Japan’s economy contracted by an annualised rate of 1.2 percent in the third quarter due to natural disasters and sluggish external demand.
But a recent run of indicators such as factory output and retail sales bolstered the view that Japan’s economy is back on track for growth, climbing out of the third-quarter slump.
Monday’s MOF data showed corporate recurring profits rose 2.2 percent in July-September from a year earlier, up for a ninth consecutive quarter, although they slowed sharply from the previous quarter’s 17.9 percent annual gain.
Corporate sales rose 6.0 percent year-on-year in July-September, up for an eighth straight quarter.
(Reporting by Tetsushi Kajimoto, editing by Eric Meijer)
