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In the December survey of the short-term corporate economic observation survey (short view) released by the Bank of Japan on 14, the business condition judgment index (DI), indicating the business sentiment of large companies and manufacturing industries, was -10.17 points from the previous survey in September. Got better. The improvement has exceeded the market forecast (minus 15) for the second consecutive quarter.
The degree of improvement in large companies and manufacturing industries has been the largest since the June 2002 survey. 15 of the top 16 industries recovered. The recovery in exports and auto-focused production fueled improving business sentiment amid the resumption of economic activity in the world, which was stalled by the spread of the new coronavirus.
Cars improved by 48 points from the time before to -13, the biggest recovery since the September 2011 survey (65-point improvement) after the Great East Japan Earthquake. Large companies and non-manufacturing industries also improved by 7 points from the previous time to minus 5. Improved for the second consecutive term.
The outlook is expected to continue to improve by minus 8 for large companies and manufacturing industries, while it is expected to deteriorate slightly by minus 6 for large companies and non-manufacturing industries. In particular, small and medium-sized enterprises and non-manufacturing industries are expected to deteriorate by 8 points to -20, and according to the Bank of Japan’s Bureau of Research and Statistics, there is widespread concern about the impact of the spread of the infection, especially among small and medium-sized businesses. It is said that there is.
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Economists opinion
Hiroaki Muto, Economist at Sumitomo Life Insurance Company:
- The recovery in business conditions is faster than expected, in particular manufacturing is performing better and non-manufacturing is recovering reasonably well.
- The assumed exchange rate has moved to a stronger yen, but the volume base of the global economy is returning faster than that. The effects of exchange rates are recovering vigorously enough to rebound.
- Capital investment is generally weak. Japan made a lot of capital investment, such as investment to save labor, but looking back now, it is a bit of a stretch. There was an aspect of excess equity capital, and the adjustment occurred at the same time at the time of Crown.
- The relative weakness of the Japanese economy compared to the overseas one appears where capital investment has not fully recovered.
Takeshi Minami, Principal Investigator at Chukin Agricultural, Forestry and Research Institute:
- Business owners like the government’s stance of prioritizing economic activities, and may think it won’t be like April or May. I’m used to corona
- However, I think most of the responses will come in late November, so if you take a poll now, the situation will be different.
- Business sentiment is sharply divided, and the downside is not the equity investment situation. I think it’s stronger now, so it was generally revised downward and big companies also turned negative. It depends on the vaccine, but there is still a lot of uncertainty.
Details
- The survey collection baseline date is November 27, and about 75% of respondents responded by then.
- Judgment of business conditions in the DI manufacturing industry improves, companies have pointed to the positive impact of the recovery in exports and automobile production and strong external demand from the United States and China.
- Voices from companies expecting an improvement in the outlook, a continued recovery in automotive-related products and a recovery in external demand such as China
- Voices pointing to the recovery of customer traffic due to the effect of the “Go To Campaign” in improving the DI business condition of non-manufacturing industries, accommodation and food and beverage services, etc.
- There is widespread concern about the effects of worsening outlooks and the spread of infection.
- Equity investment is weaker than previous revision patterns and historical averages
- As business performance deteriorates due to capital and crown investment plans, there is also a measure to temporarily suspend unnecessary and urgent projects.
background
- SeptemberBusiness confidence in large companies and manufacturing industries improved for the first time in 11 quarters. Since then, improvements have continued mainly in exports and production, but the new coronavirus infection has spread again at this time.
- Large companies and non-manufacturing industries also improved for the first time in five quarters in the September survey, but consumption of services remained restricted due to persistent caution against corona infection.
- October-December periodIn the Enterprise Economic Forecast Survey, the amount of capital investment (including software) in fiscal 2008 worsened further from the previous period in all industries, suggesting a decline in business investment motivation.
- The government announced on the 8th that the commercial scale was 73.6 trillion yen and the financial expenditure was 40 trillion yen.It decided on additional economic measures. Total national production (GDP) is expected to increase by approximately 3.6%
- Masayoshi Amemiya, Vice President of the Bank of Japan, said on the 2ndIn his conference, he said that there is great uncertainty about the consequences of infectious diseases and their impact on the national and foreign economy.
(Updated with added content)
