Overview
- Large manufacturers’ index held at +15, the highest since December 2021, with firms expecting no change in March.
- Large non-manufacturers slipped to +34 and foresee a further moderation to +28 by March.
- Smaller firms improved, with small manufacturers at +6 and small non-manufacturers at +15, the best since March 2019.
- Large companies plan FY2025/26 capital expenditure growth of 12.6% even as large manufacturers project a 7.8% drop in recurring profits.
- Firms’ inflation expectations stayed at 2.4% over one-, three-, and five-year horizons, labor shortages persisted with an employment diffusion of −38, and companies see the dollar averaging around ¥147.