TOKYO (AFX-ASIA) - A Ministry of Finance official said the all-industry diffusion index was hit by the worldwide slowdown in demand, particularly in information technology, but firms expect a rebound in the second half.
The official said the all-industry index level for the second quarter of minus 12.1, compared with a rise of 1.2 in the first quarter, was the first negative number since the third quarter to December 1999, when it was minus 3.9.
"Companies, especially manufacturers, believe underlying business conditions are deteriorating amid a worldwide slowdown in the information technology sector," he said.
However, he added that the majority of firms expect the decline to be temporary, noting the positive outlook for the all-industries index in the third quarter.
"It seems to me that firms are expecting business conditions to improve from the third quarter to September," the official said. The all-industries index for the third quarter came in at plus 0.2 pct and for the fourth quarter at plus 4.6.