Quarterly Survey of Overseas Subsidiaries
Quarterly Survey of Japanese Business Activities (July-September 1997)
Quarterly Survey of Japanese Business Activities (Second)
(July-September of 1997)
Enterprise Statistics Division of Research and Statistics Department
Highlights in the Current Survey:
The major business trends in the second quarter from July to September of the fiscal year 1997 among Japanese incorporated enterprises targeted in the current survey as respondents of domestically-based parent companies and locally-based overseas subsidiaries (Definition of the Japanese manufacturers, regarding the ownership of overseas subsidiaries through capital investment) were as follows:
- Turnover Inside/Outside Japan and Domestic Sales/Local Sales Overseas
The turnover of domestically-based parent companies showed an increase of 2.5% over the previous April to June quarter of 1997 on a total basis, reflecting their favorable export performances. On the other hand, the turnover of overseas subsidiaries declined in every region, registering a decrease of 1.7% on a total basis.
Looking at the sales forecast in the coming third quarter from October to December of the same year in terms of the DI (Note 1) ratios compared to the previous quarter, domestically-based parent companies foresaw a significant worsening in their business, forecasting a slowdown or a reduction in their domestic sales in the coming three-month period from October to December. While locally-based overseas subsidiaries envisaged a worsening picture of their future business operations in many business categories, it is worth noticing the outcome of the repercussions of the significantly improved business performances in the transportation equipment sector among the overseas subsidiaries located in North America.
- Facility Investment
- Domestic and Overseas Employment
- Trade Transactions
- Status of Overseas Subsidiaries by region
Overall, the amount of facility investment in terms of the amount of acquired tangible fixed assets excluding land rose by 23.7% as a result of the markedly increased facility investment achieved by domestically-based parent companies compared to the previous April-June quarter. The facility investment achieved by locally-based overseas subsidiaries showed a decline of 15.3% on a total basis in most regions in Asia.
Looking at the forecast for the coming October-December quarter in terms of DI ratios compared to the previous quarter, domestically-based parent companies predicted a significant decline in their facility investment portfolio in the coming three-month period. The facility investment increased in the current quarter will predictably suffer backlash from the forecast significant decline in the coming three-month period.
Looking at the territorial characteristics in business performances of locally-based overseas subsidiaries, sales fell by a total of 6.6%. More specifically, the turnover of overseas subsidiaries located in ASEAN 4 countries where the monetary crisis has been in existence since last July suffered a decline in most business categories as represented by the transportation equipment industry in the current July-September quarter as compared to the preceding April-June quarter.
Looking at the sales forecast in the coming October-December quarter in terms of DI ratios compared to the previous quarter, the overseas subsidiaries located in ASEAN 4 countries reported on their worsening sales prediction with a DI index of minus 24 points, which was the largest reduction forecast level in Asia. Viewed by country, Thailand suffered the largest sales reduction in ASEAN 4. Regarding the sales forecast on the coming October-December quarter, the worsening DI indicators in Korea and Indonesia are worth noticing.