The survey results related to corporate profits, sales, and investments, released by Japan's Ministry of Finance on Thursday, has conveyed a slight sign of optimism about future economic growth in Japan. The quarterly corporate statistics, excluding finance and insurance sectors, for the period between January and March revealed a steady increase in investment levels, with an 11% rise in equipment investments among the surveyed 30,000 companies. The total investments reached a remarkable 16 trillion and 539.5 billion yen, marking a positive streak for the eighth consecutive quarter. Although sales rose across a variety of sectors, operational inefficiencies and escalating costs led to a decline in profits for most manufacturing industries. The overall sentiment suggested by the survey data remained upbeat, hinting at a promising broader economic climate in Japan.

Increasing demand and effective marketing efforts have led to a boost in corporate sales in both manufacturing and non-manufacturing sectors. Total sales marked 378 trillion and 857.5 billion yen, recording a 5.0 % year-on-year increase. Non-manufacturing industries saw their sales rise by 6.1 %, with the hospitality and tourism sectors experiencing a notable 16.5 % jump, thanks to a resurgence in international tourist arrivals. Industries related to digital information technologies also experienced impressive growth, with a year-on-year increase of 17.9 %. Manufacturing industries enjoyed a modest 2.3 % uptick in sales.

The quarterly profits brought a mixed bag of good and bad news. Profits, defined as the money remaining after all expenses were deducted from sales, amounted to an impressive 23 trillion and 823 billion yen, reflecting a 4.3% year-on-year increase. That marked the first rise in the past two quarters and a record high when compared with corresponding quarters in previous years, as corporations weathered the pandemic's lengthy tunnel, glimpsing a silver lining ahead. Non-manufacturing industries relished a 17.2% surge in profits, while manufacturing sectors encountered a 15.7% downturn. The electricity industry, by adopting a pass-on-cost-to-consumers strategy in response to surging energy prices, savored its first profit in the last six quarters. The construction industry also celebrated a profit increase, boasting a year-on-year boost of 24.3%. By contrast, digital technological industries witnessed a profit downturn due to decreasing global demand for smartphones, personal computers. The information-related machine producing industry was hit hard, suffering a 53.1% profit reduction. The escalating prices of raw materials troubled the chemical sector, leading to a 24.4% dip in profits as the pass-on-cost-to-consumers strategy was deemed infeasible.
In a bright spot for manufacturing, a stable semiconductor supply triggered a wave of international demand, delivering unexpected profits. The transport machinery industry profited with a rise of 27.9%, and the production machinery industry witnessed an impressive profit growth of 36.0%.