Japan’s businesses increased spending for the fourth straight quarter in another sign of the country’s recovery from the pandemic.
(Bloomberg) — Japan’s businesses increased spending for the fourth straight quarter in another sign of the country’s recovery from the pandemic.
Capital expenditure excluding software rose 2.7% in the three months through March from the previous quarter, the finance ministry reported Thursday. The reading was stronger than the 0.9% increase shown earlier by the cabinet office in its preliminary gross domestic product figures.
Thursday’s data will be incorporated into revised gross domestic product figures due June 8. The initial reading showed that the Japanese economy grew more than expected in the January to March period mainly driven by resilient private and business consumption, following a technical recession at the end of last year.
The robust capital expenditure may push the preliminary figure further upward, providing a clearer indication of Japan’s recovery, which has been slower compared to other advanced economies.
The result comes after the Bank of Japan’s latest Tankan survey, which also indicated that companies were keen to invest. Their appetite has been sustained in part by labor shortages triggered by this year’s further relaxation of virus-related regulations and recovering inbound tourism demand.
The Tankan report indicated that firms are facing the worst manpower constraints in about four years, likely motivating them to accelerate digitalization efforts.
(Updates with more details from the report)
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