RTTNews - Thursday, the Ministry of Finance said in a report that Japanese companies reduced their spending on plant and equipments in the first three months of 2009. During January to March, capital spending plunged 25.3% from the previous year, following a 17.3% decline in the fourth quarter of 2008. Economists were expecting a 30% fall in investment.

Excluding software, decline in capital expenditure was 25.4%, severe than the 18.1% decrease seen in the final three months of 2008.

The government uses capital expenditure data in revising preliminary GDP numbers. According to preliminary estimate, the economy contracted by a record 4% in the first quarter of 2009 compared to the previous three months. The revised GDP report is due on June 11.

The survey also showed that combined pretax profits of companies plunged 70.1% on a yearly basis, while sales dropped 20.4% during January to March.

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