· Profits of all nonfinancial Japanese corporations declined 0.7%, in the third quarter, the  first year to year decline since the second quarter of 2002. Spending on plant and equipment declined 1.2% after having declined 4.9% in the previous quarter.  Current profits and spending on plant and equipment for all corporations are shown in the first chart. 

· While total profits declined, the big loss was felt among the mid sized corporations whose profits declined by almost 17%.  Large corporations eked out a 1.3% increase and profits among small corporations were up almost 4%.  Profits by size of corporations are shown in the second chart.  

· Both mid sized and small corporations have reduced  spending on plant and equipment during the last three quarters while large corporation have continued to report increases ever since the first quarter of 2003, as can be seen in the third chart. Plant and equipment spending declined 13% from a year ago in the non manufacturing industries in the second quarter and 5% in the second quarter.  Meanwhile capital spending continued to rise in the manufacturing industry.  A comparison of year to year changes in capital spending in the manufacturing and non manufacturing industries is shown in the fourth chart.

Note:  The Quarterly Report on Incorporated Enterprises from which these data have been taken, contain additional information from the balance sheets and income statements of non financial corporations. The full report is shown in Haver's JAPAN data base under Financial.