Japanese companies will collectively cut their capital investment by 15.9 percent in the current fiscal year ending in March, representing the sharpest decline on record, a newspaper survey released yesterday showed.
Planned capital spending by 1,475 major firms for this fiscal year stood at ¥22.7 trillion (US$230.5 billion), down ¥4.28 trillion from last fiscal year, the Nikkei Shimbun said.
It was the second straight year of decline and the biggest percentage decline since the newspaper began the twice-yearly survey in 1973.
Japanese companies have been hit hard by the global economic crisis, forcing blue-chip exporters to carry out aggressive cost cutting programs, including massive layoffs and factory closures.
The Nikkei Shimbun said any delay in an economic recovery could lead to a third straight year of declines in capital spending for the first time since the early 1990s.
Of the 17 manufacturing sectors in the survey, 15 were projected to cut investment this fiscal year, with only the food and pharmaceutical sectors planning to boost collective capital spending, the newspaper said.
Non-manufacturers were curbing planned spending by 4.5 percent, it said.
Industry leader Toyota Motor Corp expects to cut investment by ¥470 billion to ¥830 billion, while rival Honda Motor Co is forecast to slash spending by ¥200 billion to ¥390 billion.
Electronics giant Hitachi Ltd plans to cut back by more than 30 percent, while rival Toshiba Corp is expected to reduce spending on its chip segment to less than ¥100 billion, down from ¥230 billion last fiscal year.
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