Business sentiment worsened in the January-to-March quarter to a record low because of rising oil prices and concerns over the global economy, the government said Monday. ( dpa )
The business confidence index, based on a survey of large Japanese firms, fell into negative territory for the first time in three quarters to minus 9.3, down from plus 0.5 in the October-to-December quarter, according to the poll conducted by the Cabinet Office and Finance Ministry.
A negative number indicates more of the surveyed firms are pessimistic rather than optimistic.
The figure was the lowest since the government established the index in 2004.
Business confidence for large manufacturers capitalized at 1 billion yen (10 million dollars) or more stood at minus 12.9 in the reporting period while that for large non-manufacturers measured minus 7.2, the reports said.
The index was expected to improve to minus 2.3 in the next quarter and plus 6.6 in the July-September period, the government forecast.
All industrial companies expected capital investment to grow by 0.6 per cent in the 2007 fiscal year, which ends March 31, compared with the previous year.
Capital investment was expected to shrink 9.4 per cent in fiscal 2008.
For mid-sized companies, the business confidence index also hit a record low at minus 14.1, compared with minus 2.6 in the previous quarter.
The index for small companies fell to minus 30.2 from minus 18.7, also a record low.
The index is calculated by subtracting the percentage of firms that reported deterioration in their business conditions from that of firms reporting otherwise.