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Capital Spending Marks its 16th Consecutive Quarter of Increase; Corporate Profits Up

June 4, 2007
By Ken Worsley


As the Cabinet Office gets set to release revised GDP data for the first quarter of 2007, things are looking brighter on the corporate front. According to the Ministry of Finance, capital spending in Japan was up 13.6% in the first quarter of 2007, showing an increase for the 16th consecutive quarter, and a double-digit increase for the fifth straight quarter. Capital spending accounts for about 15% of GDP.

The Ministry also said that corporate profits in the first quarter of 2007 were up by 7.4% compared to the same period last year. This marks the 19th straight quarter of aggregate company gains, and matches the previous longest period of expansion recorded during the 1965-1970 economic boom.

So what does this all mean for the revising of GDP figures? Back on May 17, the Cabinet Office released its preliminary report on first quarter GDP growth, and projected it to have been 2.4% (annualized).

Those figures are set to be revised on June 11, and Bloomberg’s survey of economists places the revised figure at 3.2 percent, a figure that might make the Bank of Japan’s June Policy Board meeting slightly more interesting. We’re still standing pat that no rate hike will come until after the July Upper House elections, which means July is fair game for a rate hike.

Filed Under Business, Capital Spending, Economic Reports 

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Comments

One Response to “Capital Spending Marks its 16th Consecutive Quarter of Increase; Corporate Profits Up”

  1. Fukui Called It! (Right?) : Japan Economy News & Blog on December 2nd, 2007 10:39 pm

    […] hours after the Ministry of Finance announced that capital spending had increased for the 16th consecutive quarter and that corporate profits were up 7.4% in the same quarter, Bank of Japan Governor Toshihiko Fukui […]

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