Development Bank of Japan
Research Report
No. 21

Survey on Planned Capital Spending
for Fiscal Years 2000, 2001 and 2002
(Conducted in August 2001)

December 2001

Economic and Industrial Research Department
Development Bank of Japan

Contents

Ⅰ Outline............................................................................................................................ 1
Ⅱ Summary ........................................................................................................................3
1. Overall Condition......................................................................................................................... 3
2. Actual Capital Spending for FY2000......................................................................................... 3
3. Planned Capital Spending for FY2001...................................................................................... 3
4. Features of Planned Capital Spending for FY2001................................................................. 4
5. Planned Capital Spending for FY2002...................................................................................... 4
Ⅲ Survey Results ................................................................................................................7
1. Actual Capital Spending for FY2000......................................................................................... 7
2. Planned Capital Spending for FY2001...................................................................................... 9
3. Planned Capital Spending for FY2002....................................................................................14
4. Investment Motives ...................................................................................................................17
5. Trends in Land Investment (Classified according to Principal Business Sector) .............18
6. Capital Spending Abroad (Classified according to Principal Business Sector) .................20
7. Trends in Capital Spending by Foreign-Affiliated Firms(Classified according to Principal Business Sector)...............................................................20
8. Information Technology Investment(Classified according to Principal Business Sector)...............................................................21

Development Bank of Japan Research Report/ No. 21iI Outline
Objectives
This survey has been conducted biannually (in February and August) since FY1956 by theDevelopment Bank of Japan to assess major trends in the capital spending of Japanese industry.
The Scope of Capital Spending
In this survey, “capital spending” refers to domestic investment in the tangible fixed assets of
one’s own corporation; they include buildings, structures and equipment (including ships, aircraft,rolling stock, tools and furnishings), as well as the purchase and development of land (excluding
the purchase of land for subdivision in the real estate industry). Accordingly, intangible fixed
assets are excluded, as are capital spending abroad and investment in subsidiaries/affiliated firms(except that “information technology investment” includes intangible fixed assets as indicatedlater.)
Survey Methods
The survey was conducted by means of questionnaire (sent to and completed by individual
firms).
Capital spending has been calculated based on construction. In general, it is calculated as thesum total of tangible fixed assets, including the construction in progress account (without
subtracting resale value, depreciation and loss).
Target Firms
This survey covers all private firms in Japan’s major industries capitalized at ¥1 billion or more.
However, it excludes agriculture, forestry, finance and insurance, and medicine. In addition,
the Teito Rapid Transit Authority has been included in the survey despite the fact that it isclassified as a (non-financial) public corporation under the System of National Accounts (SNA).
Date of Survey
August 10, 2001
Contents of the Survey(i) Actual capital spending in FY2000 and planned capital spending for FY2001 and FY2002, (ii)
Details of individual construction projects in each of the above years, (iii) Anticipated revenue
and expenditure in FY2000 and FY2001, (iv) Investment motives in FY2000 and FY2001, (v)Trends in land investment in FY2000, FY2001 and FY2002, (vi) Capital spending abroad in
FY2000 and FY2001, and (vii) Information technology investment in FY2000 and FY2001.

Development Bank of Japan Research Report/ No. 21

1Responses
The responses to the survey are shown below. In terms of the number of targeted firms andrespondents, this survey is the largest among similar national surveys on the trend of capitalspending.
No. of Firms Targeted

No. of Firms Giving
Valid Responses

Proportion of Valid
Responses

3,539

3,096

87.5%

4,295

3,802

88.5%

Principle BusinessClassification
Investment SpecificClassification

On the Totals
Industrial classification
There are two types of industrial classification: principal business classification and investment
specific classification. The former classifies and totals the companies’ responses based on themain business interest of each company, while the latter classifies and totals the amount ofinvestment for each business department in a company’s response according to industrial sector.
As a rule, the investment-specific classification is used for the analysis, but the principal
business classification is adopted in some cases.
Timing of survey and years covered
The survey is conducted twice a year, in February and in August. Since each fiscal year issurveyed five times until the planned investments are materialized, the results reveal businesssentiments in minute detail, through the extent to which planned investments have been
modified for example.
Targeted FYTiming of survey
August 1999
February 2000
August 2000

1998
Actual1999

2000

Modified plan

Plan for next FY

Actual expected
ActualInitial plan
Modified plan

Plan for next FY

Actual expected
ActualInitial plan
Modified plan

Plan for next FY

Actual expected

Initial plan

February 2001
August 2001
February 2002

2

Development Bank of Japan Research Report/ No. 21

2001

2002

Capital Spending Faces an Adjustment Phase
Steady investment in IT on the user side, and research and development

II Summary
1. Overall Condition
Overall actual capital spending for all industries in FY2000 was up 4.1%, the first increase in four
years. (All figures are based on construction; the rate of growth or decline is based on acomparison with the previous year’s figures.) Planned capital spending for FY2001 shows anincrease in the manufacturing sector (up 6.2%) but a turning to a decrease in the nonmanufacturing sector (down 2.0%), meaning only a slight increase (0.6%) for all industries.
2. Actual Capital Spending for FY2000
Looking at actual capital spending for FY2000, there were downward revisions in most industrial
sectors after the previous survey (February 2001), but the overall figure was up 4.1%, the firstincrease in four years, led by substantial growth in the manufacturing sector.
3. Planned Capital Spending for FY2001
Planned capital spending for FY2001 shows an increase in the manufacturing sector but a turn todecrease in the non-manufacturing sector, providing an overall planned investment increase of
only 0.6%.
In the manufacturing sector (up 6.2%), investment as planned will show double-digit
decreases in electric machinery and electro-devices. However, planned capital spending showsincreases for chemicals, automobiles, non-ferrous metals and general machinery, led respectively
by investments in high value-added products, new models, optical parts and digital equipment
including office and household equipment.
In the non-manufacturing sector (down 2.0% overall), increases in spending are planned intelecommunications & information, as well as in electric power (despite a subdued tone), thanks
to construction works related to independent power producers (IPP). In contrast, decreases incapital spending are expected in wholesale & retail, due mainly to reaction to the previous
accelerated establishment of new outlets promoted by promulgation of the Large-Scale RetailStores Law; in real estate business, due to the curtailment of spending in retail business-related
and local projects; and in railways, due to completion of both construction of new railway lines
and expansion of existing railways lines in the Tokyo metropolitan area.
In comparison to the previous survey (February 2001), investment was revised upwards inboth the manufacturing sector (up 1.3%) and the non-manufacturing sector (up 1.0%). Although
this means an overall upward revision for two years running, the total increase of 1.1% is minor.
Year-on-year comparison in FY2001 shows an overall increase of 8.1% in the first half, but adecline of 5.6% in the second half.
Looking at the respective shares of different motives for investing in manufacturing, the shareof “product development and upgrading” remains low in the materials sub-sector but is rising in
the processing & assembly sub-sector, led by electric machinery. The share of “research anddevelopment” is rising in both sub-sectors—led by chemicals, particularly pharmaceuticals, andnon-ferrous metals in the materials sub-sector, and by electric machinery, automobiles, general
Development Bank of Japan Research Report/ No. 21

3machinery and precision machinery in processing & assembly. As a result of this broad-based
increase, the share of “research and development” is rising in the manufacturing sector as awhole. In contrast, the share of “expansion of production capacity” is lower, mainly due tocurtailed investments related to semiconductors in electric machinery.
Planned land investment is lower in both the manufacturing and non-manufacturing sectors,
down 31.5% overall from the previous year. However, land investment tends to be subject tosubstantial upward revision after the planning stage.
Turning to capital spending abroad, the ratio of capital spending abroad to domestic capitalspending reached 33.6% in FY2000 and 30.5% in FY2001 in the manufacturing sector, to whichmost of the respondents belong, thanks to the growth in investments in the US and Asia.
The domestic capital spending of foreign-affiliated firms shows an increase of 17.1% overall,
despite a substantial decline for the service sector due to the completion of large-scale themeparks, as spending will increase in transport equipment and telecommunications & information,
and will maintain the level of the previous year in electric machinery. Foreign-affiliated firms now
account for 5.0% of total capital spending in Japan.
Looking at information technology investment on the user side, continued increases are
expected in both the manufacturing sector (up 21.4%) and the non-manufacturing sector (up21.9%). Accordingly, the total for all industries will rise 21.7%, far exceeding the meager growthrate of total capital spending. Fixed intangible assets, including software development, accounted
for more than a quarter of total IT investment in fiscal 2000 (26.3%).
The ratio of capital spending to cash flow (net income plus depreciation expenses) will likely
fall in both the manufacturing sector and the non-manufacturing sector to record low levels.
4. Features of Planned Capital Spending for FY2001
IT-related investment on the equipment supply side may be further revised downwards inelectro-devices, as market conditions deteriorate for general-use memories and other items. Thismight cause a ripple effect in related industries. On the other hand, investment in IT-related
infrastructure is slated to increase in telecommunications & information, mainly for nextgeneration portable phones and high-speed Internet networks. IT investment on the user side,mainly for improving the efficiency of corporate businesses, is poised to continue to increase inboth the manufacturing and non-manufacturing sectors. The willingness to invest is still strong,
mainly in production management systems for manufacturing and in multi-functional terminals in
retail and meter reading systems in electric power for non-manufacturing.
As regards investment motives, the share of “research and development” is increasing to thedetriment of “expansion of production capacity.” Forward-looking investment seems to remain
firm, as the share of “research and development” is rising in automobiles as well as in chemicals,
including pharmaceuticals.
Elsewhere, investments related to business restructuring are gaining momentum to cope withharsh competition and the globalization of management, such as spending on the consolidation of
production systems observed in parts of the automobile and chemical industries, and investmentsin the consolidation of distribution facilities in the petroleum industry.
5. Planned Capital Spending for FY2002
Planned capital spending for FY2002 shows an overall increase of 1.4%, although many
investment projects still remain uncertain in both the manufacturing (down 9.2%) and nonmanufacturing (up 3.4%) sectors.

4

Development Bank of Japan Research Report/ No. 21

Capital Spending
FY2000(2,842 firms)
FY1999Actual

FY2000
ActualTotal
234,150 243,746
Excluding Electric Power 195,283 208,568
Manufacturing
70,94479,822
Non-Manufacturing
163,207 163,924
Excluding Electric Power 124,339 128,746
Electric Power
38,86835,178
Note: Monetary amounts are in 100 million yen.

FY2001(3,096 firms)
GrowthRate
2000/99
4.1
6.8
12.5
0.4
3.5
-9.5

FY2000
Actual

FY2001
Planned251,604
216,426
81,653
169,951
134,773
35,178253,176
217,416
86,686
166,490
130,730
35,760FY2002(1,512 firms)
Growth
FY2001
Rate
Planned2001/2000
0.6
91,7150.5
63,897
6.2
14,350-2.0
77,364-3.0
49,546
1.7
27,818FY2002
Planned93,026
66,191
13,03079,99653,162
26,834GrowthRate
2002/2001
1.4
3.6
-9.2
3.4
7.3
-3.5

Growth of Capital Spending
30

％
All
industries
全産業
製造業
Manufacturing
非製造業
Non-Manufacturing

20
10
0
-10
-20
-30
86

86

87

88

89

90

91

92

93

94

95

96

97

98

99 2000 2001 FY
PlannedDevelopment Bank of Japan Research Report/ No. 21

5Capital Spending, by Industry
Component Rate(%)
FY2001
FY2002
FY2000 FY2001(Planned) (Planned) 2000/99 2001/2000 2002/2001 (Actual) (Planned)(1,512 firms)(3,096 firms)

Capital Spending (100 million yen)
FY2000FY2001(Actual) (Planned)(3,096 firms)

Growth Rate (%)

Total
Excluding Electric Power251,604
216,426

253,176
217,416

91,71563,89793,026
66,191

4.1
6.8

0.6
0.5

1.4
3.6

100.0
86.0

100.0
85.9

Manufacturing
Food & Beverages
TextilesPaper & Pulp
Chemicals
Organic Chemicals
Pharmaceuticals
Petroleum
Cement, Ceramics & Glass
Iron & Steel
Ordinary Steel
Non-Ferrous Metals
General Machinery
Electric Machinery
Electric Devices
Precision MachineryTransportation
Automobiles
Other Manufacturing

81,653
5,630
681
2,252
10,388
4,548
2,337
936
2,494
3,925
3,226
3,140
4,385
27,262
20,741
1,515
13,244
12,515
5,802

86,686
5,783
765
2,675
11,989
5,222
2,722
1,405
2,618
4,518
3,777
4,012
4,999
25,54618,085
1,711
14,54913,7396,116

14,350
1,202
129
728
2,182
1,099
574
838
278
1,291
892
594
540
3,950
3,142
115
1,567
1,428
937

13,030
1,041
115
425
2,004
1,121
477
1,096
219
1,343
913
652
502
3,190
2,438
115
1,581
1,452
747

12.5
-3.2
-19.8
24.2
10.1
5.6
19.8
-36.8
37.1
-21.1
-23.4
64.3
0.6
38.7
60.5
34.2
-3.7
-3.2
5.3

6.2
2.7
12.4
18.8
15.4
14.8
16.5
50.1
5.0
15.1
17.1
27.8
14.0
-6.3
-12.8
12.9
9.9
9.8
5.4

-9.2
-13.4
-11.0
-41.6
-8.2
2.0
-16.9
30.9
-21.2
4.1
2.3
9.8
-7.0
-19.2
-22.4
0.4
0.9
1.7
-20.4

32.5
2.2
0.3
0.9
4.1
1.8
0.9
0.4
1.0
1.6
1.3
1.2
1.7
10.8
8.2
0.6
5.3
5.0
2.3

34.2
2.3
0.3
1.1
4.7
2.1
1.1
0.6
1.0
1.8
1.5
1.6
2.0
10.1
7.1
0.7
5.7
5.4
2.4

Non-Manufacturing
169,951
Excluding Electric Power134,773
Construction
1,695
Wholesale & Retail
14,190Retail
11,579Real Estate
12,158Transportation
17,721
Railways
12,734
Marine Transport
382
Airlines
1,686
Warehousing
1,672Electric Power & City Gas
38,351
Electric Power35,178City Gas
3,173
Telecom. & Information
39,525
Leasing
40,772Services
5,226
Other Non-Manufacturing
314

166,490
130,730
1,570
11,041
8,909
8,436
17,574
10,825
395
1,727
3,228
38,87735,7603,117
41,94242,803
3,672
575

77,36449,546
510
4,192
3,372
3,805
5,621
2,380
223
91
2,480
30,87927,8183,060
8,408
22,7731,135
42

79,99653,162
419
4,361
3,635
4,262
8,390
5,195
226
85
2,506
29,73026,834
2,896
8,616
23,415
765
38

0.4
3.5
-5.4
6.6
10.4
17.7
-5.0
-0.1
-41.8
-24.3
-10.8
-8.9
-9.5
-2.1
2.1
5.4
3.7
-13.9

-2.0
-3.0
-7.4
-22.2
-23.1
-30.6
-0.8
-15.0
3.3
2.4
93.0
1.4
1.7
-1.8
6.1
5.0
-29.7
83.3

3.4
7.3
-18.0
4.0
7.8
12.0
49.3
118.3
1.7
-6.8
1.1
-3.7
-3.5
-5.4
2.5
2.8
-32.6
-10.8

67.5
53.6
0.7
5.6
4.6
4.8
7.0
5.1
0.2
0.7
0.7
15.2
14.0
1.3
15.7
16.2
2.1
0.1

65.8
51.6
0.6
4.4
3.5
3.3
6.9
4.3
0.2
0.7
1.3
15.4
14.1
1.2
16.6
16.9
1.5
0.2

Notes: Other Manufacturing industries include Publishing & Printing, Rubber, Metal Products, and Others. Other NonManufacturing industries include Fishing, Mining, and Others.

6

Development Bank of Japan Research Report/ No. 21

III Survey Results
1. Actual Capital Spending for FY2000
OutlineOverall actual capital spending for FY2000 increased in both the manufacturing and nonmanufacturing sectors, resulting in growth of 4.1%, the first increase in four years.
In the manufacturing sector (up 12.5%), spending declined in iron & steel due to thecompletion of large-scale investment projects in the previous year, as well as in petroleum andautomobiles. However, investment grew significantly in electric machinery, led by capacity
investment in electro-devices including semiconductors and liquid crystals, thus inducing
substantial increases in spending in related industries such as precision machinery, non-ferrous
metals, and cement, ceramics & glass. On balance, the manufacturing sector experienced its firstincrease in capital spending in three years.
In the non-manufacturing sector (up 0.4%), spending increased in real estate and wholesale &retail, primarily due to the accelerated establishment of outlets ahead of the promulgation of theLarge-Scale Retail Stores Law. Spending also increased in telecommunications & information
thanks to the start of investments in system renewals, as well as in leasing, which accounts for amajor part of investment in the sector, thus resulting in the first increase in non-manufacturing
capital spending in four years.
Trends by Industrial Sub-Sector
The trends in actual capital spending for FY2000, classified according to industrial sub-sector, areas follows. (Numbers in curly brackets { } show the percentage of total capital spending
accounted for by each sub-sector.)

Materials (up 10.0%) {9.2%}
Total capital spending in the materials industries increased for the first time in three years, as
double-digit growth was recorded in the chemical industry, which represents a large portion of
spending in the materials sub-sector. Spending also turned to a significant increase in non-ferrous
metals, and cement, ceramics & glass thanks to capital investment related to information
technology, as well as in paper & pulp, with investments accompanying the consolidation of
production centers.
In iron & steel, spending continued to decline, due to the completion of large-scale
investment projects in the previous year, while textiles experienced a decline in capital investment
for a third consecutive year.
In the chemical industry, on the other hand, capital spending increased for the first time inthree years, recording double-digit growth due to investments in high value-added products inorganic chemicals and plant construction in pharmaceuticals. Spending increased in non-ferrous
metals for the first time in three years, due to investments related to optical parts and 300mm
wafers, whereas cement, ceramics & glass saw an increase in capital spending for the first time infive years, led by capacity investments in glass for LC display and ceramic products. The paper &pulp industry experienced its first substantial growth in three years, thanks to expansion in paper
manufacturing machinery accompanying the consolidation of production centers for raw
corrugated paper and whiteboard paper as well as investments related to environmental
conservation.

Development Bank of Japan Research Report/ No. 21

7Processing & Assembly (up 15.1%) {23.2%}
Spending in the processing & assembly industries rose substantially for the first time in three
years, despite declines in that for automobiles and food & beverages, as investment in electricmachinery and precision machinery increased significantly. Capital spending in general machinery
also turned to a slight increase.
Spending in automobiles declined for the third year running due to general curbs on
investment, although some investments were observed concerning new models and businessrestructuring. Food & beverages also recorded a decline for the third consecutive year.
In electric machinery, continued spending cutbacks in electronic and electrical equipment
were more than offset by a significant increase in investment in electro-devices, which accounts
for more than half of the investment in this industry, led by capacity investment insemiconductors and liquid crystals and other electronic parts. As a result, the industry
experienced its first significant growth in capital spending in three years. In general machinery,
spending rose in office and household equipment, led by that for new products, and continued toincrease in general machinery parts, due to large-scale investments to address the conceived
tightness in the market. The combination more than compensated for declines in other parts of
the industry, and as a whole, capital spending in general machinery recorded a slight increase.
Energy (down 9.9%) {16.2%}
The energy sub-sector recorded a decrease in capital spending for the seventh consecutive year.
Spending in the electric power industry decreased for the seventh year running as Japan’s ninemajor electric power companies revised their investment downwards amidst an underlying trend
toward curbs on investment. In the gas industry as well, investment in production anddistribution facilities was revised downwards and spending decreased for the fifth consecutive
year. Spending in petroleum was cut back for the eighth year running, as investments for the
reduction of benzene content in gasoline had been completed.
Non-Manufacturing, excluding Energy (up 3.7%) {51.5%}
Despite cutbacks in transportation and construction, total spending in non-manufacturing
excluding energy rose for the first time in four years, reflecting growth in leasing, real estate,wholesale & retail, telecommunications & information, and services.
In transportation, spending decreased due to controls on the purchase of new aircraft and tothe completion of the construction of LNG ships. Capital spending in construction declined forthe eighth straight year.
Meanwhile, capital spending continued to increase in leasing, thanks mainly to asset
purchases; increased for the first time in three years in real estate, primarily due to progress inlarge-scale projects in the Tokyo metropolitan area; and grew for the first time in four years inwholesale & retail with the accelerated establishment of outlets by supermarkets and other storesprior to the promulgation of the Large-Scale Retail Stores Law. In telecommunications &information, spending turned up despite declines in that for fixed phones, satellite
communication, and information services as demand increased for portable phones andinvestments were made in next-generation systems. Spending in services declined for the second
year running as investment in a large-scale theme park in the Tokyo waterfront area had passed
its peak.

8

Development Bank of Japan Research Report/ No. 21

Capital Spending, by Industry
FY1998Growth Rate (%)
FY1999 FY2000 FY2001

FY2002

FY1998

Share (%)
FY1999 FY2000

Materialsa
Paper & Pulp
Chemicals
Iron & Steel

-12.8
-33.8
-10.2
0.3

-21.5
-29.4
-22.4
-14.0

10.0
24.2
10.1
-21.1

16.2
18.8
15.4
15.1

-8.5
-41.6
-8.2
4.1

9.7
1.0
4.3
2.2

8.5
0.7
3.9
2.0

9.1
0.9
4.1
1.6

10.5
1.1
4.7
1.8

Processing & Assemblyb
Food & Beverages
Electric Machinery
Automobiles

-12.1
-12.1
-21.9
-4.2

-12.2
-2.7
-0.0
-18.6

15.1
-3.2
38.7
-3.2

1.5
2.7
-6.3
9.8

-13.7
-13.4
-19.2
1.7

21.0
2.2
7.2
5.9

20.8
2.4
8.2
5.3

23.0
2.2
10.8
5.0

23.2
2.3
10.1
5.4

Energyc
Petroleum
Electric Power

-9.2
-32.5
-8.0

-7.4
-32.3
-5.6

-9.9
-36.8
-9.5

3.1
50.1
1.7

-2.8
30.9
-3.5

17.6
0.8
15.4

18.0
0.6
16.0

15.7
0.4
14.0

16.1
0.6
14.1

Non-Manufacturing
Excluding Energyd
Construction
Wholesale & Retail
Real EstateTransportation
Telecom.& Information
LeasingServices

-4.8
-16.6
-1.7
-19.2
-8.8
3.7
-6.5
-7.1

-4.5
-35.0
-8.5
-19.2
-2.7
-12.5
7.6
38.9

3.7
-5.4
6.6
17.7
-5.0
2.1
5.4
3.7

-3.2
-7.4
-22.2
-30.6
-0.8
6.1
5.0
-29.7

8.1
-18.0
4.0
12.0
49.3
2.5
2.8
-32.6

51.6
1.2
4.8
4.3
7.0
16.4
16.5
1.3

52.7
0.8
5.2
4.0
7.6
15.4
17.6
2.1

52.2
0.7
5.6
4.8
7.0
15.7
16.2
2.1

50.3
0.6
4.4
3.3
6.9
16.6
16.9
1.5

All Industries
Excluding Electric Power

-8.0
-8.0

-8.4
-8.9

4.1
6.8

0.6
0.5

1.4
3.6

100.0
84.6

100.0
84.0

100.0
86.0

100.0
85.9

Manufacturing
Non-Manufacturing
Excluding Electric Power

-13.0
-5.6
-4.9

-15.5
-5.0
-4.8

12.5
0.4
3.5

6.2
-2.0
-3.0

-9.2
3.4
7.3

31.6
68.4
53.0

29.9
70.1
54.1

32.5
67.5
53.6

34.2
65.8
51.6

FY2001

Note: FY2000 and FY2001 share (%) figures are based upon 3,096 companies that responded to the survey in both years.
aMaterials: textiles; paper & pulp; chemicals; cement, ceramics & glass; iron & steel; non-ferrous metalsb
Processing & assembly: food & beverages; general machinery; electric machinery; precision machinery; transportation; othermanufacturingcEnergy: petroleum; electric power; city gas and coal; crude oil & natural gasdNon-manufacturing, excluding energy: non-manufacturing industries excluding those industries mentioned in ‘energy’ above

2. Planned Capital Spending for FY2001
OutlinePlanned capital spending for FY2001 shows a 0.6% increase, as an increase in the manufacturingsector will be largely offset by a reduction in the non-manufacturing sector.
In the manufacturing sector (up 6.2%), spending on electro-devices is expected to record adouble-digit decline in electric machinery, but increases are expected in chemicals, automobiles,
non-ferrous metals, and general machinery, led respectively by high value-added products, newmodels, optical parts, and digital equipment for offices and households.
In the non-manufacturing sector (down 2.0%) increased investment is planned intelecommunications & information as well as in electric power, thanks to progress inconstruction works related to independent power producers (IPP) despite the continued subdued
mood. In contrast, spending in wholesale & retail is slated to decline in reaction to the previously
Development Bank of Japan Research Report/ No. 21

9accelerated establishment of outlets prior to the promulgation of the Large-Scale Retail Stores
Law. Capital spending will also decrease in real estate, mainly due to reduction in retail-related
and local projects, as well as in railways following the completion of the construction of new lines
and the expansion of existing lines in the Tokyo metropolitan area.
Trends by Industrial Sub-Sector
The trends in planned capital spending for FY2001, classified by industrial sub-sector, are as
follows. (Numbers in curly brackets { } show the percentage of total planned capital spending
accounted for by each sub-sector.)

Materials (up 16.2%) {10.5%}
Planned capital spending in the materials sub-sector shows an increase for the second
consecutive year as double-digit growth continues in the heavy-weighted chemicals, non-ferrous
metals and paper and pulp. Spending is slated to continue increasing in cement, ceramics & glass.
It will increase for the first time in three years in iron & steel and for the first time in four years in
textiles.
Investments in consolidation for business restructuring are slated for increase. Also, spendingin chemicals is likely to be boosted by investments in high value-added products in organic
chemicals and the development of plants and laboratories in pharmaceuticals and other chemicals,
resulting in a double-digit increase for a second consecutive year. A second year of increased
capital spending is expected in non-ferrous metals, led by investments related to optical parts and
300mm semiconductor wafers, and in paper & pulp as the dearth of investments accompanying
the completion of reconstruction of paperboard production systems will be more than offset bycapacity investments in Western-style paper. Spending in cement, ceramics & glass is scheduled
to increase, backed by investments related to glass for LC display.
Meanwhile, planned spending in iron & steel is higher for the first time in three years, as plantand equipment repairs are expected to make headway, mainly among blast furnace steel
manufacturers. In textiles, capital spending is expected to increase for the first time in four years,
led by capacity investments in non-woven fabrics.
Processing & Assembly (up 1.5%) {23.2%}
Capital spending in the processing & assembly sub-sector is expected to record a small growth,
despite a downturn in electric machinery from a spectacular increase in the previous year, as
upturns are expected in automobiles and food & beverages. An increase is also expected ingeneral and precision machinery.
In the electric machinery industry, spending in electro-devices, which accounts for more thanhalf of the spending in the industry, is expected to start to decrease due to the deteriorating
market environment, with substantial semiconductor-related investments cutbacks and thecompletion of investments related to liquid crystals, resulting in a decline for the whole industry.
In automobiles, continued checks on domestic investments are expected to be more thanoffset by increases in four-wheeled vehicles, led by investments in new models, in businessreconstruction, and in parts and bodies in line with the investments in new models. On balance,
capital investment in the industry is slated to increase for the first time in four years. Investment
is planned to slightly increase in food & beverages, with contributions chiefly coming from flour
milling, sugar manufacturing, and edible oils. In general machinery, an anticipated downturn ingeneral machinery parts is expected to be more than compensated for by increases in office andhousehold equipment and other sectors of the industry. Finally, capital spending is slated tocontinue to increase in precision machinery, led by that for semiconductor manufacturing devices
10

Development Bank of Japan Research Report/ No. 21

in line with investments in next-generation products.

Energy (up 3.1%) {16.1%}
The energy sub-sector is expected to show growth for the first time in eight years.
In the electric power industry, spending is slated to increase as independent power producers
and nuclear fuel-related businesses make headway, despite continued declines in the nine major
electric power companies in line with the peaking of investments in thermal power generation.
Planning in the gas sub-sector shows an expected upturn in city gas being cancelled out by
substantial declines, mainly in the exclusive LNG business and heat supply, resulting in a sixth
consecutive year of decline overall. On the other hand, the first increase in nine years is expectedin petroleum, thanks to the consolidation of distribution facilities and active investments inenvironmental conservation measures such as light oil desulfurization.
Non-Manufacturing, excluding Energy (down 3.2%) {50.3%}
Looking at the non-manufacturing sector, excluding energy, continued increases in spending areplanned in telecommunications & information and leasing, but spending looks set to decline inreal estate, services, wholesale & retail, construction, and transportation. On balance, capitalspending in the sub-sector as a whole is expected to fall.
In telecommunications & information, spending is scheduled to increase for a second
consecutive year, led by investments in next-generation portable phones and high-speed Internet
networks in communications, as well as by spending on new office construction and digitalization
in information services and broadcasting. The leasing industry anticipates increased demand for
information-related equipment and the replacement of equipment through leasing.
Capital spending will show a substantial decline in real estate, services, and wholesale & retail,respectively due to the slowdown in local projects and establishment of retail outlets, to thecompletion of a large-scale theme park in the Tokyo waterfront area, and to reaction to the
stepped-up establishment of outlets prior to the promulgation of the Large-Scale Retail Stores
Law. The restrained mood will continue in construction, resulting in a decline in investment for
the ninth year running. Spending in transportation will start to decrease as a whole despite
increased investments in airport construction and the like as major projects will be completed forthe construction of new railway lines and the expansion of existing lines.
Trends and Features of Capital Spending in FY2001, by Industry
Trends and features of capital spending for main industries are shown below. The figures inparentheses ( ) indicate changes in the rate of growth in capital spending for the industry inquestion between FY2000 and FY2001. The figures in curly brackets { } show the percentage of
total planned spending for FY2001 accounted for by each industry.

Materials
Chemicals (10.1% → 15.4%) {4.7%}
In addition to investments in consolidation for business reconstruction, spending will post adouble-digit increase in organic chemicals, led by investments in high value-added products, aswell as in pharmaceuticals and other chemicals thanks to the development of plants andlaboratories. Increased spending is also expected in inorganic chemicals. Combining all of thesefactors, capital spending in the chemical industry as a whole is expected to rise for a second
consecutive year.

Development Bank of Japan Research Report/ No. 21

11Iron & Steel (-21.1% → 15.1%) {1.8%}
Capital spending will increase for the first time in three years on the back of equipment repairs,
mainly among blast furnace steel manufacturers and some construction works left over from theprevious year.
Non-Ferrous Metals (64.3% → 27.8%) {1.6%}
Thanks to investments related to optical parts and 300mm silicon wafers, capital spending in theindustry will increase for a second consecutive year, albeit at a slower pace.
Paper & Pulp (24.2% → 18.8%) {1.1%}
Despite already completed investment accompanying production system reconstruction in
paperboard, the industry will record an increase in spending for a second consecutive year, led bycapacity investments by some manufacturers of Western-style paper as well as by investments
related to environmental conservation.
Cement, Ceramics & Glass (37.1% → 5.0%) {1.0%}
Although spending will remain restrained in cement, investment related to glass for LC displays is
expected to rise. With increased spending expected in other areas related to cement, ceramics &glass, capital spending in the industry will grow.
Textiles (-19.8% → 12.4%) {0.3%}
Capital spending will start to increase, boosted by capacity investments in non-woven fabrics.

Processing & AssemblyElectric Machinery (38.7% → -6.3%) {10.1%}
Although spending is expected to increase in electronic and electrical equipment, investment inelectro-devices will record a double-digit drop from the substantial growth in the previous year
due to the deteriorating market environment. Thus, investments related to semiconductors will
drop substantially, while LC-related investments will start to decrease with the completion oflarge-scale projects. On balance, capital investment is expected to decline for the industry as awhole.
Automobiles (-3.2% → 9.8%) {5.4%}
Despite continued controls on investment due in part to the shift of production overseas, capitalspending in four-wheeled vehicles will increase, led by investments in new models and businessreconstruction. Investments in new models will also increase capital spending in parts & bodies
in spite of the difficult situation. As a result, overall capital spending in the industry is expected torise for the first time in four years.
Food & Beverages (-3.2% → 2.7%) {2.3%}
Although spending will decrease in processed meat & dairy products and beer & other alcoholic
beverages, capital spending in the industry as a whole is expected to increase thanks to bothindustrial restructuring in flour milling, sugar manufacturing, and edible oils, and to increased
spending in other foodstuffs.

12

Development Bank of Japan Research Report/ No. 21

General Machinery (0.6% → 14.0%) {2.0%}
Although spending will turn down in general machinery parts following the completion of largescale projects, spending is expected to accelerate in office and household equipment, led by new
products. In addition, boilers & motors, metal processing machinery, and industrial machinerywill all experience increased spending, although mainly geared toward rationalization. On balance,
capital spending in the industry will increase for a second consecutive year.
Precision Machinery (34.2% → 12.9%) {0.7%}
Double-digit increase will continue in spending for measuring instruments. Spending will also
increase in semiconductor manufacturing equipment, led by investments in next-generation
products. As an increase is also expected in medical instruments, spending for precision
machinery as a whole will increase for a second consecutive year.

EnergyElectric Power (-9.5% → 1.7%) {14.1%}
The nine major electric power companies are expected to reduce their spending as theconstruction of thermal power plants has peaked and the distribution sector will cut back on
investment. However, spending increases are expected in other parts of the industry, thanks toprogress in the independent power producers and nuclear fuel businesses, thus leading to anincrease for the industry as a whole.
Gas (-2.1% → -1.8%) {1.2%}
Although increased spending by some city gas suppliers is expected, led by investments in supply
facilities for shifting to LNG, overall investment in LNG and heat supplies will decline, primarily
due to the completion of large-scale projects. On balance, capital spending in the industry as awhole will decline for the sixth year running.
Petroleum (-36.8% → 50.1%) {0.6%}
Spending on distribution facilities is expected to increase due mainly to consolidation-related
investments and remodeling of service stations. Investment in environmental conservation will
become active in refineries, including that for the desulfurization of light oil. Thus, the industry
will experience its first increase in capital spending in nine years.

Non-Manufacturing Industries, excluding Energy
Leasing (5.4% → 5.0%) {16.9%}
Spending in leasing will increase in anticipation of increased demand for both leasing in plant andequipment replacement and for information equipment.
Telecommunications & Information (2.1% → 6.1%) {16.6%}
Telecommunications, which is the core of this industry, will see heavy investment in line withincreasing demand both for next-generation cellular phones and systems, and for high-speed
Internet networks in fixed communication. Spending in information services is also expected toincrease, mainly due to new office construction. An increase is also expected in broadcasting, led
by investments in digitalization. All in all, capital spending will rise in the industry for the second
consecutive year.

Development Bank of Japan Research Report/ No. 21

13Railways (-0.1% → -15.0%) {4.3%}
Capital spending will be reduced due to the completion of construction of new lines and line
extensions in the Tokyo metropolitan area.
Wholesale & Retail (6.6% → -22.2%) {4.4%}
In wholesale, spending will be cut for the third straight year, as investments related to head
offices will come to a halt. In retail, department stores will maintain the level of the previous year,
mainly through floor expansion and remodeling. However, spending will be reduced substantiallyin supermarkets and other stores in reaction to the previously accelerated establishment of newoutlets prior to the promulgation of the Large-Scale Retail Stores Law, and there will be somecases of store downsizing. Thus, the industry is expected to suffer a sizable drop in capitalspending.
Real Estate (17.7% → -30.6%) {3.3%}
Although construction of large office buildings will continue in the Tokyo metropolitan area,
spending will decline in retail-related projects in line with the expected slowdown in theestablishment of new outlets and the start of local projects. Purchases of existing assets, whichwere active in the previous year, are also expected to drop as a result. On balance, capitalspending in real estate will show a substantial decline.
Services (3.7% → -29.7%) {1.5%}
Capital spending will fall substantially, following the completion of a large theme park in theTokyo waterfront area.
Warehousing & Transportation (-10.8% → 93.0%) {1.3%}
A substantial increase is expected, as airport construction gets underway.
Construction (-5.4% → -7.4%) {0.6%}
Capital spending will be reduced for the ninth year running as investment continues to be
restrained, mainly among major general contractors.
Airlines (-24.3% → 2.4%) {0.7%}
Spending will increase led by investments in aircrafts and computerization.
Marine Transport (-41.8% → 3.3%) {0.2%}
Although the construction of LNG transport ships will be terminated, an increase is expected inother shipbuilding, leading to positive growth overall.
3. Planned Capital Spending for FY2002
Planned capital spending for FY2002 for all industries shows an increase of 1.4%. However, inboth the manufacturing sector (down 9.2%) and the non-manufacturing sector (up 3.4%), there
are a large number of capital spending decisions that still have not been made.

14

Development Bank of Japan Research Report/ No. 21

Characteristics of Capital Spending, by Industry
Change on previous year in FY2000
Share in FY1999 spending

Figures indicate[FY2000]-40-30

Food &
beverages

Share (%)

-10

0

10

Textiles
−19.8
0.3

−36.8
0.6

30

40

Non-ferrous metals

−21.1
2.1

-50
0

Change onprevious year
(%)

0.7

Iron & steel

64.3
0.8

Generalmachinery

0.6
1.8

Electrical machinery

12.5
30.3

38.7
8.2

20

Precisionmachinery

−11.1
0.3

-30

-20

6.2
32.5

10

20

Chemical30

50 Change on
previous year
(%)

1.7

Precision machinery

Automobiles
9.8
5.0

−7.4
0.7

Other transport
equipment
11.0
0.3

Other manufacturing
5.4
2.3

Wholesale& retail−22.2
5.6
Real estate

40

−30.6
4.8

Marine transport

Railways

3.3
0.2

−15.0
5.1

8.2
0.5

Airlines

Warehousing &transportation

2.4
0.7

93.0
0.7

50

Electric power
−9.5
16.6
60

Other transportation
12.3
0.5

Electric power
1.7
14.0
60
Gas

Gas
−2.1
1.4

−1.8
1.3
−2.0
67.5

Telecommunications& information
technology

70

Telecommunications& information
technology

70

6.1
15.7

2.1
15.1
80

80

Leasing

Leasing
5.4
16.4

90

Other non-manufacturing

-40

-30

-10

0

10

20

Other nonmanufacturing
83.3
0.1

Services

3.7
2.0
-20

5.0
16.2

90

Services

−13.9
0.2
100
-50

40

Petroleum
50.1
0.4
Iron & steel
Non-ferrous
15.1
metals
1.6
General27.8
machinery
1.2
14.0

15.4
4.1

Construction

Non-manufacturingNon-manufacturing
0.4
69.7

30

TextilesPaper & pulp 12.4
18.8
0.3
0.9

−6.3
10.8

Other transportation

Airlines Warehousing &−24.3 transportation50
0.9 −10.8
0.8

20Electricalmachinery

Railways
−0.1
5.4

−41.8
0.3

2.7
2.2

10

12.9
0.6

17.7
4.2

Marine transport

0

Cement, ceramics &
glass
5.0
1.0

Real estate

40

-10

Food &
beverages

Other manufacturing
5.3
2.3
Wholesale & retail
6.6
5.3

Construction
−5.4
0.8

-40

Increase

34.2
0.5

Automobiles
−3.2
5.5

Other transport equipment

30

50

24.2
Chemical 0.8
Cement, ceramics & glass
10.1
3.9
37.1

Petroleum

1020

Paper & pulp

−3.2
2.4

Manufacturing-20

Change on previous year in FY2001
Share in FY2000 spending

Decrease

Manufacturing-500Increase

Share (%)

Decrease

Figures indicate[FY2001]

30

40

50

100
-50

−29.7
2.1
-40

-30

-20

-10

0

10

20

All industries average

All industries average

4.1 %

0.6 %

30

40

50

Development Bank of Japan Research Report/ No. 21

15

[FY2002]

Change on previous year in FY2002
Share in FY2001 spending

Figures indicate

Decrease

Manufacturing

15.6

Share (%)

−9.2

Increase

20
30
40
50 Change on
pervious year
Textiles Food & beveragesPetroleum(%)
−13.4
−11.0
Paper & pulp Chemicals
30.9
1.3
0.1
−41.6 −8.2
0.9
2.4
0.8
Iron & steel
Cement, ceramics
4.1
Non-ferrous& glass
Generalmetals
1.4−21.2 machinery
9.8
Electrical machinery
−7.0
0.3
0.6
10
−19.2
0.6
Precision machinery
4.3
Other transport equipment
Automobiles 0.4
−7.1
0.1
0.2
1.7
1.6
Other maunfacturing
Wholesale & retail
−20.4
4.0
1.0 Construction
4.6
20
−18.0
-50
0

-40

-30

-20

-10

0

10

Real estate

0.6

12.0
4.1

Airlines
−6.8
0.1
Other
transportation
−15.6
0.5

30

Railways
118.3
2.6
Marine transport
1.7
0.2

Warehousing &transportation

1.1
2.7

40
Electric power−3.5

Non-manufacturing

30.3

3.4
84.4

50

60

Gas
−5.4

3.3

Telecommunications& information technology
2.5
9.2

70

80
Leasing
2.8
24.8
90

Other non-manufacturing

Services

−32.6

100
-50

−10.8

1.2
-40

0.0
-30

-20

-10

0

10

20

All industries average
1.4 %

16

Development Bank of Japan Research Report/ No. 21

30

40

50

4.

Investment Motives

Investment Motives in the Manufacturing and Non-Manufacturing Sectors in FY2001
Looking at the respective shares of each category of investment motive for the manufacturingsector in FY2001 one finds increases in “product development and upgrading,” “research anddevelopment” and “maintenance” as well as a huge drop in the share of “expansion of
production capacity.”In the non-manufacturing sector, the share of “expansion of production capacity” still
exceeds 50% but is declining, mainly in electric power, railways and retail. In contrast, the shareof “maintenance” is increasing.
Investment Motives in the Manufacturing Sector’s “Materials” and “Processing &Assembly” Industries
We now look at the respective shares of each category of investment motive within the
manufacturing sector, comparing the materials sub-sector with the processing & assembly subsector. For the materials sub-sector, the motives “maintenance” and “rationalization and laborsaving” are traditionally high, whereas for the processing & assembly sub-sector, “productdevelopment and upgrading” is more important.
The characteristics of investment motives for the materials industries in FY2001 are as
follows:
i. Increased shares of “maintenance” (23.0% → 24.2%) and “rationalization and labor saving”(19.3% → 19.9%), with contributions from chemicals and iron & steel;ii. A rise in the importance of “research and development” (6.9% → 7.3%) for the first time infour years, with contributions from chemicals and non-ferrous metals; andiii. A decline in the share of “expansion of production capacity” (28.7% → 27.5%).
The significant trends for the processing & assembly sub-sector are as follows:
i. A substantial drop in the importance of “expansion of production capacity” (33.4% →28.7%), due to a decline in electric machinery and changes in the composition of investments;
ii. A substantial increase in “product development and upgrading” (21.7% → 24.6%); andiii. A sizable increase in “research & development” (9.1% → 11.7%), supported by a wide range
of industries.
Shift in Investment Motives within the Manufacturing Sector
We now look at the change in the percentage share of each category of investment motive for the
manufacturing sector. The share of “expansion of production capacity” has declined from 31.8%
to 28.4% due to reduced investments in semiconductors and liquid crystals in electric machineryand a respite in capacity investments, mainly in cement, ceramics & glass.
For “product development and upgrading,” the share has stabilized at a low level in thematerials sub-sector but increased in the processing & assembly sub-sector, led by electricmachinery, resulting in an increase from 16.7% to 18.3%.
Despite leveling off in the processing & assembly industries, “rationalization and laborsaving” increased its share slightly from 14.7% to 15.1% thanks to increases in the materials subsector, including iron & steel for blast furnace repairs and paper & pulp.
For “research & development,” the share increased from 8.3% to 10.0% in the manufacturingsector as a whole, led in the materials sub-sector by chemicals, including pharmaceuticals, andnon-ferrous metals, including optical fiber and silicon, and in the processing & assembly sub-Development Bank of Japan Research Report/ No. 21

17sector by a wide range of industries, including electric machinery, automobiles, general machineryand precision machinery.
The share of “maintenance” increased from 14.8% to 15.4% overall, led by materials
industries such as chemicals and iron & steel.
Investment Motives
Total

Manufacturing

Non-Manufacturing(2,204 firms)

Materials

Processing & Assembly

FY2000FY2001

FY2000FY2001

FY2000FY2001

FY2000FY2001

FY2000FY2001

ActualPlannedActualPlannedActualPlannedActualPlannedActualPlanned

Expansion of Production
Capacity

49.4

45.8

31.8

28.4

28.7

27.5

33.4

28.7

57.1

54.2

Product Development
and Product Upgrading

8.1

9.5

16.7

18.3

6.8

6.8

21.7

24.6

4.3

5.1

Rationalization andLabor Saving

6.8

7.7

14.7

15.1

19.3

19.9

12.7

12.7

3.4

4.0

Research & Development

3.2

4.1

8.3

10.0

6.9

7.3

9.1

11.7

1.0

1.2

Maintenance

13.9

14.7

14.8

15.4

23.0

24.2

10.4

10.5

13.5

14.4

Others

18.6

18.3

13.7

12.8

15.3

14.3

12.9

11.8

20.7

21.0

Total

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

Note: Figures are given as percentages.

5. Trends in Land Investment (Classified according to Principal Business Sector)
Actual Land Investment for FY2000
Actual land investment for FY2000 (based on figures for the 1,788 firms that gave responses
regarding both FY1999 and FY2000) was down 11.6% compared with the previous year, thefourth consecutive annual decline. As the movement of assets between affiliates for businessrestructuring has peaked, land investment in the manufacturing sector declined 36.8% due to a
respite in the purchase of industrial sites, mainly in electric machinery. In the non-manufacturingsector, the drop in land investment slowed to 2.0% thanks to investments in new airport sites intransportation and land purchases related to redevelopment, mainly in the Tokyo metropolitan
area in real estate. As a result, land investment accounted for 5.8% of total capital spending (3.5%
in manufacturing, 6.9% in non-manufacturing).
Planned Land Investment for FY2001
Planned land investment for FY2001 (based on figures for the 2,272 firms that gave responses
regarding both FY2000 and FY2001) was down 31.5% following the peaking of investments in
new airport sites in transportation, and there are no significant developments other thanenhancement of the information service sector in telecommunications and information. (Landinvestment accounts for 3.7% of all investment planned for FY2001.)
It should be noted that there is a tendency for large upward revisions in land investment
between the planning stage and actual implementation.
Planned Land Investment for FY2002
Planned land investment for FY2002 (based on figures for the 1,225 firms that gave responses
regarding both FY2001 and FY2002) is down 29.2% from the previous year. (Land investment
accounts for 3.9% of all investment planned for FY2002.) Planned land investment for FY2002

18

Development Bank of Japan Research Report/ No. 21

is even more subject to revision than is that for FY2001, however.
Trends in Land Investment
FY1999FY2000(Actual) (Planned)(1,788 firms)
Total Investment
Investment excluding
Land
Investment in Land
Share of Land (%)

GrowthRate (%)
2000/99

FY2000FY2001
Growth(Actual) (Planned) Rate (%)(2,272 firms)
2001/2000

FY2001
FY2002Growth(Actual)(Planned) Rate (%)(1,225 firms)
2002/2001

143,353

145,465

1.5

173,253

174,064

0.5

71,13072,691

2.2

133,801

137,025

2.4

163,776

167,577

2.3

67,076

69,820

4.1

-11.6

9,476

6,488

-31.5

4,054

2,871

-29.2

5.5

3.7

5.7

3.9

9,552

8,440

6.7

5.8

43,81647,264

7.9

55,533

61,91011.5

11,362

10,147-10.7

41,17945,598

10.7

53,55260,94413.8

11,15010,044

-9.9

-36.8

1,981

966

-51.3

-51.0

3.6

1.6

-1.3

117,720

112,155

Manufacturing
Total Investment
Investment excluding
Land
Investment in Land
Share of Land (%)

212

104

1.9

1.0

-4.7

59,76862,544

106,633-3.3

55,926

59,776

6.9

5,522

-26.3

3,842

2,768

-28.0

6.4

4.4

2,637

1,666

6.0

3.5

99,537

98,201

92,62291,426-1.3

110,225

6,915

6,775

-2.0

7,495

6.9

6.9

6.4

4.9

Non-Manufacturing
Total Investment
Investment excluding
Land
Investment in Land
Share of Land (%)

4.6

Growth Rate of Total Investment in Land by All Industries
93

94

95

96

97

98

99

2000

2001

(FY)
2002

(%) 30
20

18.1

10
0

-20

-50

-14.8

-16.5

-11.6

-21.3

-24.5
-30.5

-30
-40

-4.3

-11.1

-10

-40.0

-39.9

-43.4

-42.5

-32.0
-36.8

-38.2

-40.7

-41.0

-34.3

-47.5 -47.9

-54.6

-60
-70
-80

-31.5

-29.2

-33.9

-55.8

-66.6

Actual (Survey
in August of the following year)
実績（翌年８月調査）
Planned （当年８月調査）(Survey in August of the same year)
計画
Planned （前年８月調査）(Survey in August of the previous year)
計画

Development Bank of Japan Research Report/ No. 21

19

6. Capital Spending Abroad (Classified according to Principal Business Sector)
Capital spending abroad
Capital spending abroad* in all industries will rise 3.9% from ¥1,123.0 billion in FY2000 to¥1,166.9 billion in FY2001 (based on figures for the 1,178 firms that gave responses regarding
both FY2000 and FY2001). (Capital spending abroad by the manufacturing sector will increaseby 2.5%, while that by the non-manufacturing sector will rise by 12.0%.) In the manufacturingsector, which accounts for 85% of capital spending abroad in the survey responses, there is a
decline in spending of 10.2% for the materials industries, mainly in chemicals, whereas in theprocessing & assembly sub-sector, investment will record a growth of 7.5%, mainly due to active
spending in transport equipment in the US. In the non-manufacturing sector, increases inindustries such as leasing, telecommunications & information, wholesale & retail, andconstruction will contribute to a 12.0% increase overall.
The ratio of capital spending abroad to domestic capital spending within the
manufacturing sector
The ratio of capital spending abroad to domestic capital spending for the manufacturing sector(based on figures for the 544 firms that gave responses regarding both FY2000 and FY2001)
stands at 33.6% for FY2000 and 30.5% for FY2001. For FY2001, there is a decline from 32.5%
to 25.2% in the materials sub-sector, due mainly to drops in chemicals and non-ferrous metals.
For the processing & assembly industries, the ratio stays almost unchanged, from 34.8% to33.9%, with active investments in the US in automobiles being offset by an investment decline inelectric machinery.
Capital Spending Overseas, by Region
Region

FY2000

AmountShare

FY2001

Share

Change (%)
2001/2000

Capitalspending
overseas

US
EU

4,923
1,474

43.8
13.1

5,269
1,317

45.2
11.3

7.0
-10.7

Asia
Others

3,557
1,276

31.7
11.4

3,829
1,254

32.8
10.7

7.6
-1.7

(1,178 firms)

Total

11,230100.0

11,669100.0

3.9

Note: Monetary amounts are in 100 million yen.

7. Trends in Capital Spending by Foreign-Affiliated Firms (Classified according to
Principal Business Sector)
Out of 3,096 firms that responded to the survey for both FY2000 and FY2001, 159 are classified
as foreign-affiliated firms (firms with over one-third foreign ownership). The share of theircapital spending in the total has risen from 2.7% (FY2000) to 5.0% (FY2001), as more companies
are now classified as foreign-affiliated firms.
*

20

Note: “Capital spending abroad” by a company refers to capital spending conducted overseas by either thecompany itself or one of its overseas subsidiaries. (Here, an “overseas subsidiary” of a company is anoverseas firm for which the company holds at least 10% of the shares.)

Development Bank of Japan Research Report/ No. 21

Planned capital spending by foreign-affiliated firms for FY2001 is 17.1% higher than in theprevious fiscal year. In the manufacturing sector, the share is 13.1% as electric machinery firms
plan to maintain the level of the previous year while the heavy-weighted transport equipment andchemicals firms will also make significant contributions. In the non-manufacturing sector, thesubstantial drop expected in services following the completion of large-scale theme parks is morethan offset by active investments in telecommunications & information, resulting in a 21.8%
increase from the previous year overall.
Planned capital spending by foreign-affiliated firms in FY2002 is also higher, up 9.0% fromthe previous year.
Capital Spending by Foreign-Affiliated Firms (Classified according to Principal Business
Sector)Capital Spending
FY1999(Actual)

FY2000(Actual)(116 firms)
Total

4,797

6,639

Growth Rate

Share

FY2000 FY2001 FY2001 FY2002
2000/99 2001/2000 2002/2001(Actual) (Planned) (Planned) (Planned)(159 firms)
10,831(159 (All firms)
firms)(83 firms)

12,683

1,895

2,065

FY2001

38.4

17.1

9.0

100.0

5.0

Manufacturing

3,602

4,811

5,841

6,606

1,108

1,180

33.5

13.1

6.5

52.1

7.5

Non-Manufacturing

1,194

1,828

4,991

6,077

787

885

53.0

21.8

12.5

47.9

3.7

Materials

970

1,389

1,551

1,887

164

171

43.2

21.7

4.4

14.9

6.7

Processing & Assembly

2,449

3,317

4,105

4,397

622

626

35.4

7.1

0.7

34.7

7.5

By sector

EnergyNon-Manufacturing
excluding Energy

183

105

185

322

322

383

-42.5

74.1

18.8

2.5

0.8

1,194

1,828

4,991

6,077

787

885

53.0

21.8

12.5

47.9

4.8

Notes: Foreign-affiliated firms are firms with over one-third foreign ownership.
Monetary amounts are in 100 million yen.

8. Information Technology Investment (Classified according to Principal Business
Sector)Contents of the survey
The survey concerns the investments related to information aimed at improving the businessefficiency and productivity of firms (corresponding to any of the following four factors: “tangible
fixed assets,” “intangible fixed assets,” “leasing contracts,” and “other expenses”). This is thethird survey on information technology investment since its inception in August 2000.
Actual IT investment in FY2000
Actual IT investment in FY2000 (based on figures for the 1,466 firms that responded to thesurvey for both FY1999 and FY2000) rose 9.6% for all industries, recording growth that exceedsthat of total capital spending in manufacturing (up 16.2%) as well as non-manufacturing (up6.1%). (Total capital spending rose 1.0%.) By sector, “materials” industries led the manufacturingsector with investments in production management systems, while the heavy-weighted “electric
power” industry made a major contribution in non-manufacturing.
Tangible fixed assets accounted for 31.9% of actual IT investment in FY2000, followed byintangible fixed assets with 26.3%, leasing contracts with 25.1%, and other expenses with 16.7%.

Development Bank of Japan Research Report/ No. 21

21Planned IT investment for FY2001
Planned IT investment for FY2001 (based on figures for the 1,807 firms that responded to thesurvey for both FY2000 and FY2001) will continue to increase both in manufacturing (up 21.4%)
and non-manufacturing (up 21.9%). The overall increase of 21.7% is particularly significant
because total capital spending is expected to increase only slightly. By sector, the introduction
and renewal of production management systems and the upgrading of new product design
functions are planned in the manufacturing sector in general, with substantial contribution from“transport equipment.” The “petroleum” sector is also moving toward system integration forbusiness restructuring. In the non-manufacturing sector, the growth of IT investment will slow
somewhat in the heavy-weighted “electric power” sub-sector, which will be more thancompensated for by substantial increases in “wholesale & retail,” led by multi-functionalterminals and point-of-sale related investments by convenience stores, as well as increases in“transportation” thanks to system renewal in airlines and railways.
Consequently, the share of IT investment in total capital spending is expected to rise.
Revisions to IT investment
In comparison with the previous survey on IT investment (February 2001), planned IT
investment for FY2001 has been revised upwards by 13.0%. The non-manufacturing sector (up18.0%) accounts for a major part of the upward revision.
Overview of IT Investment (actual figures for FY2000)
Industrial sector
All industries
Manufacturing
Non-Manufacturing

Change inChange inAmount of IT
IT
capitalinvestment
investment
spending(1,466 firms)
2000/1999 2000/1999
FY1999FY2000(1,466 firms) (1,466 firms)
ActualActual
7,897
8,657
9.6
1.0
2,794
3,246
16.2
11.4
5,103
5,411
6.0
-1.8

Share of
IT investment
FY1999Actual
100.0
35.4
64.6

FY2000
Actual
100.0
37.5
62.5

IT investment/
capital spending
FY1999Actual
7.2
11.9
5.9

FY2000
Actual
7.8
12.4
6.4

Note: Monetary amounts are in 100 million yen.

Composition of IT Investment (actual figures for FY2000)
Definition of IT Investment
Others16.7%

Tangible fixed
assets31.9%

Intangible fixed
assets26.3%
Leasing
contracts
25.1%

22

Development Bank of Japan Research Report/ No. 21

For the purpose of this survey, IT investment
refers to the capital spending deemed as suchby the respondent firms, and covers thefollowing four items:(i) Tangible fixed assets,(ii) Intangible fixed assets and investments(software development and other costs
credited to assets rather than accounted
for as costs),(iii) Leasing contracts (the amount of newly
concluded leasing contracts and not thatof leasing charges for the fiscal year), and(iv) Other expenses (PCs and other officeequipment accounted for as costs).

Overview of IT Investment (planned figures for FY2001)
Industrial sector
All industries
Manufacturing
Non-Manufacturing

Change inChange inAmount of IT
IT
capitalinvestment
investment
spending(1,807 firms)
2001/2000 2001/2000
FY2000FY2001
ActualPlanned (1,807 firms) (1,807 firms)
10,322
12,565
21.7
1.3
3,396
4,122
21.4
13.3
6,927
8,443
21.9
-2.3

Share of
IT investment
FY2000
Actual
100.0
32.9
67.1

FY2001
Planned
100.0
32.8
67.2

IT investment/
capital spending
FY2000
Actual
7.7
11.1
6.7

FY2001
Planned
9.3
11.9
8.3

Note: Monetary amounts are in 100 million yen.

Revisions to IT Investment (FY2000, FY2001)
Industrial sector
All industries
Manufacturing
Non-Manufacturing

FY2000, Estimated or Actual
IT investment (1,562 firms)
Revisions
Previous
Current(1,562 firms)
surveysurvey
8,998
9,048
0.6
3,276
3,179
-3.0
5,722
5,869
2.6

FY2001, Planned
IT investment (1,258 firms)
Previous
Current
surveysurvey
6,333
7,157
1,999
2,045
4,334
5,112

Revisions(1,258 firms)
13.0
2.3
18.0

Note: Monetary amounts are in 100 million yen.

Comparison between IT Investment and Capital Spending (FY2000 - FY2001)
Industrial sector(1,525 firms)
All industries(2000/2001 growth)
Excluding leasing
Manufacturing
Non-Manufacturing

Tangible fixed
assets in IT
investment(Tangible fixed
assets + leasing) in
IT investment

FY2000 FY2001 FY2000 FY2001
Actual Planned Actual Planned
3,291
4,876
5,885
7,554
48.1%
28.4%
3,288
4,868
5,875
7,539
892
1,185
1,873
2,304
2,399
3,691
4,012
5,250

(Tangible fixed
assets +leasing)/capitalspending
FY2001 FY2000 FY2001 FY2000 FY2001
Planned Actual Planned Actual Planned
135,832
2.5
3.6
4.4
5.6
1.3%
120,552
2.7
4.0
4.9
6.3
34,690
2.9
3.4
6.1
6.6
101,142
2.3
3.6
3.9
5.2

Capital spending
FY2000
Actual
134,152
119,841
30,629103,521

Tangible fixed
assets/capitalspending

Note: Monetary amounts are in 100 million yen.

Development Bank of Japan Research Report/ No. 21

23

List of Back Numbers (Including JDB Research Report)
No. 21 Survey on Planned Capital Spending for Fiscal Years 2000, 2001 and 2002 (this issue)
No. 20 Current Situation and Challenges for Cable Television in the Broadband Era, October 2001
No. 19 Recent Trends in the Japanese Economy: The Japanese Economy under Deflation, August 2001
No. 18 Introduction of a Home Appliance Recycling System: Effects & Prospects: Progress towards
Utilisation of Recycling Infrastructure, June 2001
No. 17 Survey on Planned Capital Spending for Fiscal Years 2000 and 2001, June 2001
No. 16 Revitalization of Middle-aged and Elderly Workers in Japan’s Labor Markets: Requiring the
Expansion of the Vocational Training Functions, March 2001
No. 15 Risk-Averting Portfolio Trends of Japanese Households, March 2001
No. 14 Consumption Demand Trends and the Structure of Supply: Focus on Retail Industry Supply
Behavior, March 2001
No. 13 Recent Trends in the Japanese Economy: Weakness of Current Economic Recovery and Its
Background, March 2001
No. 12 Emipirical Reassessment of Japanese Corporate Investment Behavior: Features and Changes sincethe 1980s, based on Micro-level Panel Data, March 2001
No. 11 Survey on Planned Capital Spending for Fiscal Years 1999, 2000 and 2001, October 2000
No. 10 Job Creation and Job Destruction in Japan, 1978-1998: An Empirical Analysis Based on EnterpriseData, September 2000
No. 9

Recent Trends in the Japanese Economy: Information Technology and the Economy, September
2000

No. 8

Trend of International Reorganization Affecting the Japanese Automobile and Auto Parts Industries,
June 2000

No. 7

Survey on Planned Capital Spending for Fiscal Years 1999 and 2000, June 2000

No. 6

Current Status and Future Perspective of the Japanese Remediation Industry: Technology andMarket for Underground Remediation, May 2000

No. 5

Recent Trends in the Japanese Economy: The 1990s in Retrospect, March 2000

No. 4

Destabilized Consumption and the Post-bubble Consumer Environment, February 2000

No. 3

The Slump in Plant and Equipment Investment in the 1990s: Focusing on Lowered Expectations,the Debt Burden and Other Structural Factors, January 2000

No. 2

Survey on Planned Capital Spending for Fiscal Years 1998, 1999 and 2000, November 1999

No. 1

Corporate Strategies in Japan’s Semiconductor Industry: Implications of Development in Other
Asian Countries, November 1999

JDB Research Report
No. 96 Recent Trends in the Japanese Economy: Focused on Fixed Investment and Capital Stock, August
1999
No. 95 Efforts to Protect the Natural Environment in the United States and Germany: Environmental
Mitigation and Biotope Conservation, July 1999
No. 94 Survey on Planned Capital Spending for Fiscal Years 1998 and 1999, June 1999
No. 93 Towards the realization of ‘environmental partnership’: A survey of Japan’s environmental NPO
sector through comparison with Germany, June 1999

No. 92 The Impact of Demographic Changes on Consumption and Savings, March 1999
No. 91 Recent Research and Development Trends in Japanese Enterprises: Technology Fusion, March
1999
No. 90 Recent Trends in the Japanese Economy: Prolonged Balance Sheet Adjustment, January 1999
No. 89 Impact of Asset Price Fluctuations on Household and Corporate Behavior: A Comparison between
Japan and the U.S., December 1998
No. 88 Survey on Planned Capital Spending for Fiscal Years 1997, 1998, and 1999, December 1998
No. 87 Foreign Exchange Rate Fluctuations and Changes in the Input-Output Structure, November 1998
No. 86 Structural Changes in Unemployment of Japan: An Approach from Labor Flow, November 1998
No. 85 Recent Trends in the Japanese Economy: Characteristics of the Current Recession, August 1998
No. 84 R&D Stock and Trade Structure in Japan, August 1998
No. 83 Survey on Planned Capital Spending for Fiscal Years 1997 and 1998, August 1998
No. 82 The Significance, Potential, and Problems of DNA Analysis Research: Establishing Public
Acceptance is Essential, May 1998
No. 81 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1996, 1997 and1998 Conducted in August 1997, March 1998
No. 80 Recent Trends in the Japanese Economy: Growth Base of the Japanese Economy, January 1998
No. 79 Information Appliances: The Strength of Japanese Companies and Tasks for the Future, January
1998
No. 78 Challenges and Outlook for the Japanese Machinery Industries: Impact of ISO14000 Series andEnvironmental Cost, January 1998
No. 77 Current Conditions and Issues of Computerization in the Health Care Industry: For theConstruction of a Health Care Information Network, January 1998
No. 76 Household Consumption and Saving in Japan, December 1997
No. 75 The Direction of Japanese Distribution System Reforms: Strengthening the Infrastructure to
Support Diverse Consumer Choices, November 1997
No. 74 Foreign Direct Investments by Japanese Manufacturing Industries and Their Effects on
International Trade, October 1997
No. 73 The Impact of the Changing Trade Structure on the Japanese Economy: With Special Focus on the
Effects on Productivity and Employment, October 1997
No. 72 An Analysis of Foreign Direct Investment and Foreign Affiliates in Japan, August 1997
No. 71 Recent Trends in the Japanese Economy: Stock Replacement and New Demand as Aspects of
Economic Recovery, August 1997
No. 70 Corporate Fundraising: An International Comparison, June 1997
No. 69 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1996 and 1997
Conducted in February 1997, May 1997
No. 68 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1996 and 1997
Conducted in August 1996, August 1997
No. 67 An International Comparison of Corporate Investment Behavior: Empirical Analysis Using Firm
Data from Japan, France and the US, April 1997
No. 66 Housing in the National Capital: Analysis of the Market for Housing using Micro Data, March 1997
No. 65 The Environment for Locating Business Operations in Major East Asian Cities, January 1997

No. 64 Direction of Reconstruction of Business Strategy in the Chemical Industry, January 1997
No. 63 Reflection on Discussions Concerning Regulation of the Electric Power Industry: Deregulation of
the Electric Power Industry in Japan and Implication of Experiences in the United States,
December 1996
No. 62 Current Status and Future Perspective of the Japanese Semiconductor Industry, November 1996
No. 61 A Breakthrough for the Japanese Software Industry?: Responsiveness to Users’ Needs is the key,
October 1996
No. 60 Recent Trends in the Japanese Economy Focusing on the Characteristics and Sustainability of theCurrent Economic Recovery, September 1996
No. 59 Analysis of the Primary Causes and Economic Effects of Information: Related investment in the
United States and Trends in Japan, August 1996
No. 58 Selected Summaries of Research Reports: Published in FY1995, June 1996
No. 57 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1995 and 1996
Conducted in February 1996, May 1996
No. 56 Recent Trends in the Japanese Economy, May 1996
No. 55 Issues Concerning the Competitiveness of the Japanese Steel Industry, February 1996
No. 54 Changes in the Financial Environment and the Real Economy, January 1996
No. 53 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1994, 1995 and1996 Conducted in August 1995, October 1995
No. 52 Current Economic Trends: Focusing on the Appreciation of the Yen and its Effects, October 1995
No. 51 Problems Concerning the International Competitiveness of the Petrochemical Industry, October
1995
No. 50 An Economic Approach to International Competitiveness, October 1995
No. 49 Selected Summaries of Research Reports Published in FY1994, July 1995
No. 48 Strategies for Improving the Efficiency of the Japanese Physical Distribution System: Part 2, July
1995
No. 47 Issues on International Competitive Strength of the Auto Industry, June 1995
No. 46 Problems Concerning the International Competitiveness of the Electronics and Electric Machinery
Industry, June 1995
No. 45 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1994 and 1995
Conducted in March 1995, June 1995
No. 44 Strategies for Improving the Efficiency of the Japanese Physical Distribution System, March 1995
No. 43 Capital Spending Recovery Scenario Cycle and Structure, August 1994
No. 42 Progress of International Joint Development between Industrialized Countries on the Private Level,
May 1994
No. 41 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1993, 1994 and1995 Conducted in August 1994 , November 1994
No. 40 Selected Summaries of Research Reports Published in FY1993, June 1994
No. 39 Recent Trends in Japan’s Foreign Accounts, April 1994
No. 38 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1993 and 1994
Conducted in March 1994, April 1994
No. 37 Economic Zones and East Asia Prospect for Economic Activity Oriented Market Integration,
December 1993

No. 36 Japanese Corporate Responses to Global Environmental Issues, December 1993
No. 35 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1992, 1993 and1994 Conducted in August 1993, September 1993
No. 34 Structure of Profit to Capital in the Manufacturing Industry, September 1993
No. 33 Comparison of the Japanese and The U.S. Labor Markets, October 1992
No. 32 The Relative Competitiveness of U.S., German, and Japanese Manufacturing, March 1993
No. 31 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1992 and 1993
Conducted in March 1993, April 1993
No. 30 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1991, 1992 and1993 Conducted in August 1992, December 1992
No. 29 Flow of Funds in the 80s and Future Corporate Finance in Japan, November 1992
No. 28 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1991 and 1992
Conducted in February 1992, April 1992
No. 27 An Analysis of Foreign Direct Investment in Japan, March 1992
No. 26 Projection of Japan's Trade Surplus in 1995: Analysis of Japan's Trade Structure in the 80s, February
1992
No. 25 Intra-Industry Trade and Dynamic Development of The World Economy, November 1991
No. 24 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1990, 1991 and1992 Conducted in August 1991, September 1991
No. 23 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1990 and 1991
Conducted in February 1991, March 1991
No. 22 Trends of the Petrochemical Industry and its Marketplace in East Asia, March 1991
No. 21 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1989, 1990 and1991 Conducted in August 1990, September 1990
No. 20 Deepening Economic Linkages in The Pacific Basin Region: Trade, Foreign Direct Investment andTechnology, September 1990
No. 19 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1989 and 1990
Conducted in February 1990, March 1990
No. 18 Petrochemicals In Japan, The US, and Korea an Assessment of Economic Efficiency, February
1990
No. 17 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1988, 1989 and1990 Conducted in August 1989, October 1989
No. 16 Impact of the EC Unification on Japan’s Automobile and Electronics Industries, August 1989
No. 15 Industrial and Trade Structures and the International Competitiveness of Asia’s Newly
Industrializing Economies, August 1989
No. 14 The Japan Development Bank Reports on Capital Investment Spending: Survey for Fiscal Years
1988 and 1989 Conducted in February 1989, March 1989
No. 13 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1987, 1988 and1989 Conducted in August 1988, September 1988
No. 12 Growing Foreign Investors’ Activities and the Future of Internationalization, September 1988
No. 11 Futures Tasks and Prospects for the Japanese Machine-Tool Industry, July 1988
No. 10 International Division of Labor in the Machine Industries Among Japan, Asia’s NICs and ASEANCountries, June 1988

No. 9Trends of the Petrochemical Industry and its Marketplace in East Asia around Japan, May 1988

No. 8

The International Competitiveness of Japan and U.S. in High Technology Industries, April 1988

No. 7

The Japan Development Bank Reports on Private Fixed Investment in Japan, March 1988

No. 6

Economic Projections of the Japan’s Economy to the Year 2000, February 1988

No. 5

The Japan Development Bank Reports on Private Fixed Investment in Japan, September 1987

No. 4

Current Trends in the Japanese Auto Parts Industry in Overseas Production, July 1987

No. 3

Current Moves for Foreign Direct Investment into Japan, May 1987

No. 2

Overseas Direct Investments by Japanese Corporations, May 1987

No. 1

Current U.S. Consumption Trends, May 1987