Japanese Tankan Corporate Survey Not as Upbeat as Hoped
April 2, 2012
10,894 companies participated in the latest quarterly survey done by Japan’s central bank. In the table below which documents the evolution of results, abbreviations used in the first four columns of data stand for big manufacturers (Bm), big non-manufacturer (Bnm), small manufacturers (Sm) and small non-manufacturers (Smn). Where an “a” or no suffix is shown after the date, the figures are actual results. An “f” suffix after March 2012 and June 2012 represents predicted results made three months before those respective dates. Thus, the bottom three rows are expected March 20121 results projected in the December 2011 survey (Mar 2012f), actual results of the March 2012 survey reported today (Mar 2012a), and what respondents in the latest survey think the results will be in the next survey to be taken in June 2012.
The values in this table are diffusion indices showing the percent of companies where conditions are favorable minus the percent claiming conditions to be unfavorable and omitting any firms where conditions have seemed neutral. When the diffusion index is positive, there is more optimism than pessimism. Only big non-manufacturers are projected to be more optimistic than pessimistic at midyear 2012, and all firms collectively anticipate a three-point deterioration between now and then. Big manufacturers three months ago had projected a reading of minus 5 in today’s report, which was very similar to the actual reading of minus 4, but the consensus of analysts more recently was a score of minus 1. From that perspective today’s results are disappointing. Moreover, while small firms are more optimistic now than three months ago, renewed deterioration is predicted over the coming three months.
Today’s survey introduced fiscal 2012 (year ending March 31, 2013) forecasts for sales, earnings and planned investment spending. The picture depicted is a pretty stagnant one, with all firms collectively anticipating sales growth of 1.4% with profits climbing 2.1% and investment contracting by 1.3%. Estimates of sales in fiscal 2011 was revised downward to 1.5%. All firms now believe that earnings fell 9.4% last fiscal year, a bigger drop than assumed three months ago. Capex spending only rose about 0.8% in FY11.
| Bm | Bnm | Sm | Snm | All | |
| Dec 1998 | -49 | -39 | -56 | -43 | |
| Dec 1999 | -17 | -19 | -32 | -28 | |
| Dec 2000 | 10 | -10 | -16 | -23 | |
| Dec 2001 | -38 | -22 | -49 | -39 | -40 |
| Dec 2002 | -9 | -16 | -33 | -36 | -28 |
| Dec 2003 | 11 | -9 | -13 | -28 | -15 |
| Dec 2004 | 22 | 11 | 5 | -14 | 1 |
| Dec 2005 | 21 | 17 | 7 | -17 | 5 |
| Dec 2006 | 25 | 22 | 12 | -4 | 10 |
| Dec 2007 | 19 | 16 | 2 | -12 | 2 |
| Mar 2008 | 11 | 12 | -6 | -15 | -4 |
| Jun 2008 | 5 | 10 | -10 | -20 | -7 |
| Sep 2008 | -3 | 1 | -17 | -24 | -14 |
| Dec 2008 | -24 | -9 | -29 | -29 | -24 |
| Mar 2009 | -58 | -31 | -57 | -42 | -46 |
| Jun 2009 | -48 | -29 | -57 | -44 | -45 |
| Sep 2009 | -33 | -24 | -52 | -39 | -38 |
| Dec 2009 | -25 | -21 | -41 | -34 | -31 |
| Mar 2010 | -14 | -14 | -30 | -31 | -24 |
| Jun 2010 | 1 | -5 | -18 | -26 | -15 |
| Sep 2010 | 8 | 2 | -14 | -21 | -10 |
| Dec 2010 | 5 | 1 | -12 | -22 | -11 |
| Mar 2011 | 6 | 3 | -10 | -19 | -9 |
| Jun 2011 | -9 | -5 | -21 | -26 | -18 |
| Sep 2011 | 2 | 1 | -11 | -19 | -9 |
| Dec 2011 | -4 | 4 | -8 | -14 | -7 |
| Mar 2012f | -5 | 0 | -17 | -21 | -13 |
| Mar 2012a | -4 | 5 | -10 | -11 | -6 |
| Jun 2012f | -3 | 5 | -15 | -16 | -9 |
Copyright Larry Greenberg 2011. All rights reserved. No secondary distribution without express permission.
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