Japanese government data indicates that capital investment by Japanese companies fell in the first quarter of 2007 for the first time in 17 quarters, raising fears for the economy as a whole as the service industry faltered.
The weak figures led some analysts to speculate that Japan's Gross Domestic Product as a whole may contract for the first time in 20 quarters and further reduce expectations that the Bank of Japan would soon raise super-low interest rates. However, some experts cautioned that one-off factors were behind the sharp slip. The Tokyo Stock Exchange's benchmark Nikkei-225 index closed down a modest 0.27 percent amid unease over the data, dealers said.
The finance ministry said that companies, excluding the financial sector, reduced capital spending by 4.9 percent in the three months to June compared with the year earlier. The results of the survey are used to calculate revisions in the GDP for the second quarter. Japan releases its revised growth figures next Monday.
In the preliminary estimate released last month, the government said the world's second largest economy grew by a mere 0.1 percent in the quarter to June, or 0.5 percent on an annual basis. If the revision turns out a negative figure, it would be the first contraction in 20 quarters for Japan, which is experiencing its longest expansion since World War II as it recovers from recession in the 1990s.
"Given the unexpectedly weak quarterly result, the possibility now seems high that the real GDP figure will be revised down to reflect a contraction," said Junichi Makino, Daiwa Institute of Research senior economist. Makino added that more data needed to be seen, with some analysts saying a change in sample size likely altered the result of the survey.
The finance ministry surveyed 24,706 companies with capital funding of more than 10 million yen ($86,300) and received replies from 77.5 percent of them. Ameriforge acquires Prince Industries AM available 9/6 # Ameriforge Group Inc. (www.ameriforge.com), acquired Prince Industries, a provider of precision machining for large seamless rolled rings and other forgings used in high-growth industries, including power generation, aerospace, and industrial. Terms of the transaction were not disclosed.
David Heminger, president and chief executive officer of Ameriforge Group Inc. said, "The acquisition of Prince Industries continues our aggressive growth by deepening our precision machining capabilities and operational competencies to the benefit of our key customers. Prince Industries has done business with Ameriforge during the past several years, both in the machining of forged components and precision forge-die production."
Ameriforge Group is a manufacturer of forged products and services including engineering design, forging, machining, testing, welding, assembly, and supply chain management. The company is organized into three distinct market focused business segments including connectors and sealing technology, power generation and aerospace, and transportation, oil & gas, and industrial.