Japan chamber cites better sentiment

This marked a turnaround of business sentiment in the first half of this year with expectation for a recovery in consumption, thanks to the economic measures, Hiroki Mitsumata, chairman of the chamber’s economic research committee, said yesterday.

The range of improvement is expected to expand significantly in the second half of this year, he said.

The JCCB surveyed business sentiment from May 23 to June 15 by mailing a questionnaire to 1,705 of its members, which drew responses from 26.9 per cent or 459 companies.

The major concerns raised to the government include the prolonged stability of the political situation and continuation of the government’s economic stimulus measures, especially the development of public infrastructure and the grant of monetary measures to boost the economy. 

“For external factors, they are worried about the world economic difficulty, particularly the fluctuation of oil prices and currencies,” said Mitsumata, also the new president of the Bangkok branch of the Japan External Trade Organisation (Jetro).

In the first six months of this year, companies reporting that their business performance was improving increased by 5 percentage points to 35 per cent from the previous term. 

Companies reporting deteriorating performance decreased by 6 percentage points to 28 per cent from the second half of last year. 

In manufacturing, business sentiment weakened in the textiles segment, but strengthened in the food and chemical industries.

For the second half of this year, companies forecasting their business performance improving increased sharply by 13 percentage points to 41 per cent, while firms anticipating deteriorating decreased from the previous survey by 11 points to 21 per cent. 

In manufacturing, business sentiment is anticipated to decline in steel and non-ferrous metals, while increasing in general and transportation machinery.

According to the survey, companies anticipating better sales this year increased by 9 percentage points to 54 per cent, while those anticipating a more than 20-per-cent increase in their sales slipped by 2 percentage points from 13 per cent in the previous survey to 11 per cent. 

This is quite a contrast from last year, when companies reporting an increase dropped 5 percentage points to 45 per cent. 

Companies reporting more than a 20-per-cent increase in their sales last year remained unchanged at 13 per cent.

Mitsumata said that regarding the Thai government, the predominant response from the Japanese companies operating here was the promotion of economic measures, especially in the development of public infrastructure (57 per cent), followed by stability of the political situation (56 per cent), customs-related systems and their implementation (43 per cent) and development of infrastructure in the Bangkok metropolitan area (41 per cent). 

Despite the plunge in oil prices, 42 per cent of the Japanese companies said there was no impact on their business activities. However, 8 per cent said there was a positive impact. 

Only 3 per cent said they had a negative impact, and 8 per cent said the negative impact was slight.

For potential export markets in the future, the predominant response was Vietnam (39 per cent), followed by Indonesia (32 per cent), India (28 per cent), Myanmar (25 per cent) and Cambodia (16 per cent). 

Among the top 10 export markets, seven are in Asean. The others are India, Japan and the United States.