Japanese corporate profits rose 24.6 percent in the second quarter, while investment rose 1.6 percent and manufacturers cut it
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Ordinary profits at Japanese companies rose 24.6 percent from a year earlier in the April to June quarter, to 44.7 trillion yen, the Ministry of Finance reported Tuesday. Sales rose 5.9 percent to 393.9 trillion yen.
Investment did much less. Spending on plant, equipment and software rose 1.6 percent to 13.0 trillion yen, leaving a 23.0 percentage point gap between the growth rates for profit and investment.
Manufacturing split the two lines
Manufacturers recorded a 57.0 percent increase in ordinary profits. Their investment fell 3.7 percent.
The largest profit increase in the manufacturing table belongs to information and communication electronics equipment, up 171.2 percent. Ordinary profits in transport equipment rose 50.6 percent. Investment moved the other way in both groups, falling 29.3 percent and 17.0 percent respectively.
Non-manufacturing companies increased ordinary profits by 9.8 percent and investment by 4.7 percent. Services investment rose 25.9 percent, while spending by goods rental and leasing companies rose 24.9 percent.
The survey does not give causes. Its headline tables exclude finance and insurance, which the ministry reports separately. Including those industries, ordinary profits rose 25.8 percent to 51.3 trillion yen.
Cash and deposits ended the quarter 7.8 percent higher than a year earlier. The liquidity ratio still fell to 18.3 percent from 19.5 percent because the ministry measures those liquid holdings against sales.
