Preliminary figures for Japan's gross domestic product in the April-June period will very likely be revised downward to reflect a sharp drop in equipment investment over the same quarter.
Preliminary figures for Japan's gross domestic product in the April-June period will very likely be revised downward to reflect a sharp drop in equipment investment over the same quarter.
The Cabinet Office is set to announce second preliminary GDP figures on Sept. 9. The numbers are expected to be downgraded from the first preliminary figures after the Finance Ministry on Sept. 2 released the Financial Statements Statistics of Corporations by Industry for the April-June period that showed a steep drop in capital spending.
According to the ministry's statistics, investment in equipment, including software, by all industries--with the exception of the financial and insurance sectors--slid 7.8 percent year on year to 7.71 trillion yen ($100.43 billion) in the second quarter of 2011.
This was the first year-on-year decline in four quarters. Manufacturers saw a drop of 2 percent to 2.74 trillion yen.
In particular, the electric machinery, chemical and steel sectors took a beating, reporting a fall of 20-30 percent.
Investment by the nonmanufacturing industry decreased to 4.98 trillion yen, down 10.7 percent.
The ministry said these numbers suggest a trend by various industries to curb investment after the Great East Japan Earthquake and tsunami in March.
The initial preliminary GDP figures for the April-June period reflected an increase of 0.2 percent in investment in real terms from the January-March period.
The growth rate in real terms for the April-June period is expected to be down from a decline of 0.3 percent from the previous quarter given in the initial preliminary figures.
The annualized growth rate in real terms will also likely drop from a fall of 1.3 percent.