FY2026 Report: Challenges of a Full-Scale Shift to a Growth-Oriented Economy | Chapter 8Growth and Moderate Inflation Expectations Spur Investment

The analysis used the Cabinet Office's Survey of Corporate Trends Concerning Efforts to Improve Productivity to examine the relationship between companies' economic perceptions and equipment investment.

Companies that forecast larger market size and higher real growth in the Japanese economy were statistically more likely to increase their equipment investment plans for one year and five years ahead. Companies expecting moderate price increases also showed stronger investment intentions, while excessively low or excessively high inflation expectations restrained investment, indicating a hump-shaped relationship.

Maintaining growth expectations, an environment conducive to passing costs on to prices, and stable, moderate price increases could support not only corporate equipment investment but also wage increases, thereby promoting capital stock accumulation and medium- to long-term economic growth.

Investment promotion policies need to be designed with differences between manufacturing and non-manufacturing, large, mid-sized, and small and medium-sized companies, as well as circumstances such as labor shortages, in mind.

Companies showed the strongest investment intentions for maintenance and replacement, followed by labor-saving measures, AI, digital technology and software, and capacity expansion. In labor-saving investment, the introduction of web- and IT-related software and systems stood out, while production automation also advanced in manufacturing. By contrast, investment related to the SDGs was relatively sluggish.

Companies that felt it had become easier to pass costs on to prices were more positive about equipment investment. For raw materials and energy, 45.5% said it had become "somewhat easier," compared with 37.7% for labor costs. Labor costs remain more difficult to pass on than raw materials and other costs.

The main reasons for hesitating to invest were insufficient budgets, uncertainty about the outlook, a lack of prospects for business expansion, and shortages of human resources. Cloud accounting data from small companies covered 17,183 companies with capital of less than 10 million yen and examined expenses and other items from 2021 to 2024, finding that the growth in labor costs fell below the growth in sales.