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Tuesday, November 14, 2006

Japanese Manufacturers Doing Good Business In US

A new survey released by the Japan External Trade Organization (JETRO) showed both strong performance and increasing confidence from Japanese manufacturers doing business in theUnited States.

The annual survey of Japanese manufacturers operating in the U.S., released in Japan on Oct. 26, reflects the situation of a total of621 responding companies. Responses were collected by JETRO's six US offices (Atlanta, Chicago, Houston, Los Angeles, New York, and SanFrancisco) in July and August.

The survey shows positive trends for these Japanese companies, reflecting growth in both the Japanese and U.S. economies:

-- The percentage of companies forecasting operating profits for 2006 increased 5.2 points from the previous survey to 80.9%, the highest-ever figure since the question was added to the survey in 1991. Meanwhile, companies expecting to post an operating loss fell 1.0 point, to 8.6%, setting a record low for the fourth consecutive year. These statistics indicate that Japanese manufacturers in the US are benefiting from a booming US market. The main reason given for this improvement was an "increase in sales in the domestic (US) market" (65.4%).

-- The upward trend suggested by the survey is thought to continue through 2007. Of the respondent companies, 55.3% -- the highest rate since the collapse of dot com bubble in 2000 -- expect to further improve operating profits next year. In contrast, the number of manufacturers expecting to post a decline in profit in the next fiscal year fell 14.2 points from last year to 5.4%, the lowest rate since the survey began. It is clear that business sentiment among Japanese manufacturers in the US is generally improving, JETRO says.

The JETRO Survey of Japan-affiliated Manufacturers in the U.S. has been conducted annually since 1981. JETRO has provided information and support to American companies entering the Japanese market for over 50 years.


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