TOKYO (AP) -- Japanese companies slashed spending at a record pace in the first quarter, hurt by a severe slump in global demand that drained corporate pocketbooks.
Investment in plant and equipment excluding software tumbled 25.4 percent from a year earlier, the Ministry of Finance said Thursday. The figure was better than expected but surpassed the previous record decline of 23 percent posted in late 1962.
Among manufacturers -- a key driver of the world's second-biggest economy -- companies making electronics, machinery and metal products reported particularly steep cuts in capital spending.
The survey of corporate statistics also showed that combined pretax profits across all industries plunged by a record 69 percent to 4.27 trillion yen.
Like its Asian neighbors, Japan's heavy reliance on exports proved devastating over the past six months. Marquee brands such as Toyota and Sony posted massive losses last year and became among the most visible casualties of the recession.
They, along with other big exporters, have cut production, workers and plans for expansion in an effort to climb back to profitability.
The finance ministry's survey will be used to revise gross domestic product numbers for the January-March quarter. A preliminary report said Japan's economy shrank 15.2 percent, which many officials and analysts say likely marked the bottom of the recession.
Based on the figures, Goldman Sachs economist Chiwoong Lee in Tokyo says the economy contracted 15.8 percent in the first quarter but expects it to begin growing in the months ahead.
"We forecast positive GDP growth from April-June as a result of progress in inventory adjustment, policy expectations and export bottoming," Lee said.