Spending nosedives in Japan

TOKYO: Japanese companies cut spending at the fastest pace in 54 years as a slump in global demand eroded profits, leaving less money for plant and equipment.

Capital spending excluding software fell 25.4 percent in the three months ended March 31 from a year earlier, the largest drop since the government began the survey in 1955, the Ministry of Finance said yesterday in Tokyo. Profits tumbled a record 69 percent.

Manufacturers from Panasonic Corp to Konica Minolta Holdings Inc have cut jobs and are closing factories or scaling back spending plans amid an unprecedented decline in exports. Still, production and shipments abroad have picked up since last quarter, and companies will gradually start to increase spending later this year, said economist Kyohei Morita.