(RTTNews) - Japanese large manufacturers' business confidence weakened in the first quarter and it is set to fall further in the coming three months, results of the quarterly Tankan survey by the Bank of Japan revealed Monday.
The headline sentiment index for big manufacturers fell to 11 in the March quarter from 13 in the preceding period. This was the first drop in a year. Nonetheless, the score was slightly above economists' forecast of 10.
The large manufacturers' outlook indicator came in at 10, which was below the expected 11.
The business confidence among large non-manufacturers rose to 34 in the first quarter from 32 in the prior period. The reading was the strongest since 1991. However, the index is seen falling to 27 in the June quarter.
Further, the survey showed that large companies plan to increase their capital investment by 4.0 percent in the fiscal 2024. However, this was much weaker than the 11.5 percent estimated increase in the preceding fiscal year. The employment conditions index slid to -36 in the first quarter from -35 a quarter ago. The indicator underscores severe labor shortages.
The Tankan survey signals that a rapid recovery from the likely slump in the first quarter GDP looks unlikely, Capital Economics economist Gabriel Ng said.
Elsewhere on Monday, the Purchasing Managers' survey data published by S&P Global showed that Japan's manufacturing activity contracted for a tenth straight month in March but the rate of decline eased amid softer reductions in both output and new orders.
The au Jibun Bank manufacturing Purchasing Mangers' Index rose to 48.2 in March from 47.2 in February. The score was the highest in four months.
