The results of the Reuters Corporate Survey revealed that a majority of the Japanese firms are less affected by a tax increase last month than from the previous increase five years ago.
Key Findings:
“More than 70% of companies in the Reuters poll said both the rush to buy ahead of the Oct. 1 increase and the subsequent pullback has been milder than when sales tax increased from 5% in April 2014.
That tax hike dealt a blow to private consumption, which makes up about 60% of the economy.
Although the impact this time seems smaller, that may mask underlying weakness in the world’s third-longest economy.
On hiring, 63% said they plan to maintain current levels, while 16% plan to trim their workforce; 62% plan to hold the line on base pay while 4% aim to reduce their wage bill.
The survey, conducted from Oct. 24 to Nov. 1 for Reuters by Nikkei Research, canvassed 503 big and midsize nonfinancial companies.”
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