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Firms expecting sales, profits to double from last FY -- Hoping “foreign demand,” “political support” to help do better -- Introduction In the domestic economy, some large companies are experiencing a recovery of business thanks to increase in demand from China and other countries as well as improvements in domestic demand. Meanwhile, many other companies are suffering from the tough business environment, and households still refrain from increasing spending. Under such circumstances, corporate performance is attracting public attention. Teikoku Databank conducted a survey to study corporate attitudes towards business forecasts for fiscal 2010. Research Period: March 19 to 31, 2010 Research Subject: 21,882 corporations across the nation (Valid Responses: 10,870 corporations; response rate of 49.7%) This is the second survey on business forecasts following the first one conducted in March 2009. Results of the Research 26.2% expect a rise in sales and profits in fiscal 2010 2,820 companies said they planned for or expected their sales and ordinary profits to increase in fiscal 2010. These companies accounted for 26.2% of the 10,767 companies that gave valid responses, not including those who said they did not know or did not choose any answer, doubling from the 13.1% the survey response rate for fiscal 2009. Meanwhile, 25.5% of the companies that gave valid responses expected their sales and profits to decline, decreasing 19.5 points from the 45.0% for fiscal 2009 to almost the same percentage of those who expected their sales and profits to increase. 34.5% chose "continuing growth of the Chinese economy" as an upturn factor, while 52.9% chose "a further drop in personal consumption" as a downturn factor for business in fiscal 2010, both accounting for the largest share of respective factors As the most likely factor that would turn business around in fiscal 2010 (multiple answers allowed), the most common of the 10,870 valid responses, accounting for 34.5%, was "foreign demand (continuing growth of the Chinese economy)," followed by "foreign demand (recovery of the U.S. economy)," accounting for 28.8%, indicating that companies expect recovery of demand in foreign countries such as China and the United States to have a favorable impact on their business. Meanwhile, 52.9% of all the valid responses chose "a further drop in personal consumption" as the most likely factor to hurt business in fiscal 2010 (multiple answers allowed), implying that more than half of Japanese companies consider a slowdown of personal consumption, which is the largest part of domestic demand, as having the biggest potential to damage business results. In addition, about 40% of the valid responses were issues related to deterioration in both income and employment, with "Decrease in income" coming in second and "Deterioration in employment" coming in fourth in company rankings. Many companies concern about deterioration in domestic demand, especially relating to consumption. Companies have obviously begun to expect for economic recovery as the percentage of companies that expect their sales and profits to increase has doubled from a year ago. Their momentum to achieve improved business results remains weak, however, and optimism before the economy recovers from deflation and personal confidence in the economy improves is premature. Survey on corporate attitudes towards business forecasts for fiscal 2010 
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