Apr. 2018
Survey of Corporate Attitudes towards Capital Investment in 2018
Amidst continuing strong exports but emerging negative factors in the domestic economy, such as a serious manpower shortage and raw material price hikes, capital investment is increasing as corporate performance improves. The government is also promoting policies for productivity improvement, such as expansion of the SME investment promotion tax system in the 2018 budget.
— Teikoku Databank has conducted a survey of corporate attitudes towards the capital investment plan for FY 2018. This survey was conducted in conjunction with the April 2018 TDB Trends Research. —
Introduction
Companies are required by concerned interests that their crucial business operation will not be interrupted, or will resume within a short period of time even if it is interrupted when they are damaged by a disaster or an accident, etc. Therefore, preparing disaster prevention and mitigation measures in advance as well as response measures in the event of a disaster and after a disaster has become increasingly important, on the assumption that corporate activities will be impacted through various risks such as a natural disaster, or an information security incident.
Teikoku Databank has conducted a survey of corporate attitudes towards the capital investment plan for FY 2018. This survey was conducted in conjunction with the April 2018 TDB Trends Research.
*Survey period: April 16 – April 30, 2018, Companies Surveyed: 23,118, Valid Responses: 9,924 (Response Rate: 42.9%).
*Details of this survey can be found on the dedicated Economic Trend Survey HP. (http://www.tdb-di.com).
Primary points of survey results(summary)
- 1 62.4% of companies “have” plans to make capital investments in 2018. There are large differences depending on company size, with “SMEs” (60.3%) and small-sized companies (49.0%), while “large companies” exceed 70% (70.7%). By industry, “agriculture, forestry, and fisheries” show the highest (80.4%), and “transport, warehousing” (78.0%), and “manufacturing” (75.0%) also show high percentages. On the other hand, 29.8% “have no plans.”
- 2 With respect to capital investment details, “replacement of equipment” (45.4%) was the highest (multiple answers), followed by “maintenance and repair of existing equipment” (35.7%), “labor saving/rationalization” (28.2%), ”increased production, strengthening of sales ability (for domestic)” (24.1%), and “informatization-related (IT investments)” (23.8%). Investment in manpower shortage ranked high, along with replacement demand.
- 3 In terms of costs for capital investment, “10 million yen and above, but less than 50 million yen” had the most answers (28.0%), and the average estimated capital investment amount was approximately 139.28 million yen. The difference depending on the number of employees is large, ranging from 39.61 million yen for “5 people and under,” to 621.04 million yen for “over 1,000 people.” With respect to capital procurement method, “own resources” (48.9%) accounted for the highest percentage, and when combined with “long-term borrowing from a financial institution” (28.4%), these items had 77.3% and occupied 80% of the total.
- 4 Reasons for not making capital investment included, “cannot foresee the future” (40.0%) had the most answers, followed by “equipment under the present status is at the appropriate level” (35.8%), and “income commensurate with the investment cannot be secured” (21.2%). Uncertainty over the future and profitability, and severe management environments, became factors, especially for SMEs in deferring capital investment.