TOKYO (Kyodo) -- Business confidence among large Japanese companies deteriorated further in the January-March period to hit a new record low, as industries across the board faced difficulties with receding domestic and external demand amid the global economic slump, a government poll showed Monday.
The index of business conditions at companies capitalized at 1 billion yen or more came to minus 51.3 on an all-industry basis, down 15.6 points from minus 35.7 in the October-December quarter, according to the joint survey by the Cabinet Office and Finance Ministry.
The latest figure reached a new record low for the second straight month since the government started a comparable quarterly poll in the April-June period in 2004.
In the January-March period, the business confidence index for large manufacturers stood at a record-low minus 66.0, down from minus 44.5 in the previous quarter. The index for large nonmanufacturers was a record-low minus 42.6, down from minus 30.5 in the October-December period.
The index is compiled by subtracting the percentage of companies reporting deteriorating business conditions from that of firms reporting improving conditions.
On employment, the indexes for large, midsize and small firms all indicated excess staffing for the first time, according to the survey.
Looking ahead, the survey said the business confidence index for large companies is projected to pick up slightly in the coming quarters to hit minus 24.8 in the April-June period and minus 7.0 in the July-September quarter.
But a ministry official cautioned against optimism, saying many firms polled in the latest survey forecast business conditions will be unchanged or could not make a projection due to uncertainty. In the upcoming quarters, their sentiment could further worsen, he said.
The poll also showed companies in all industries estimate a 10.3 percent fall in capital investment in fiscal 2008 from a year before, worsening from a 9.8 percent drop projected in the previous poll, and a 29.4 percent tumble in fiscal 2009 from a year earlier.
Manufacturers plan to spend 7.3 percent less in the business year through March 31 than in fiscal 2007, and 37.9 percent less in the fiscal year starting April 1 than in fiscal 2008.
Nonmanufacturers plan to cut such spending by 12.7 percent in fiscal 2008 and by 22.8 percent in fiscal 2009, the survey showed.
For midsize companies capitalized at 100 million yen or more but less than 1 billion yen, the all-industry business confidence index sank to a fresh record-low level of minus 51.3 from minus 33.3 in the October-December quarter.
The index for small companies -- capitalized at 10 million yen or more but less than 100 million yen -- slipped from minus 40.7 in the previous quarter to a new record low of minus 52.9.
The survey, conducted Feb. 25, covered 14,125 companies, of which 79.2 percent responded.