Quarterly Survey of Overseas Subsidiaries
Quarterly Survey of Japanese Business Activities (January-March 1998)
Enterprise Statistics Division,
Research and Statistics Department,
Ministry of International Trade and Industry,
Highlights in the Current Survey:
The major business trends in the fourth quarter from January to March of the fiscal year 1998 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
Combined sales at Parent companies in Japan fell by 4.6% from the same quarter a year ago, with a 7.5% fall in domestic sales partially offset by a 7.1% growth in exports. Combined sales at Overseas subsidiaries rose by 5.6%, with growth posted in all areas except ASEAN4 and NIES3 where sales fell by 26.7% and 7.9% respectively. Overseas subsidiaries in these two areas also reported declines in local sales, reflecting the extent of the deterioration in the real economies. On the other hand, a brisk growth was continuing in North America as seen in the 11.5% sales growth at Overseas subsidiaries there.
The percentage of the Parent companies anticipating sales growth in the 1998 April-June quarter fell sharply, as seen in a drop of 15.7 points (from -2.6 to -18.3) in the DI from the preceding quarter (Note 1). But the percentage of the Overseas subsidiaries expecting sales growth edged up by 0.3 points (26.8 to 27.1). However, the sharp drop of 14.5 points (42.8 to 28.3, the first double-digit drop since the survey began in the 1996 October-December quarter) in the apparently brisk North America reminds us that the trend should be carefully watched.
- Equipment Investments
- 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.
Combined exports of Parent companies in Japan increased by 7.1%, and their combined imports decreased by 3.6%, from the corresponding quarter a year ago. The percentage of the trade with Overseas subsidiaries is rising steadily, with exports and imports growing 15.7% and 7.0% respectively.