Firms’ projections of earnings in fiscal 1997 indicate that smaller nonmanufacturing firms anticipate a decline in profits for the first time in four years, strongly affected by a decline in public investment and in personal consumption. In the manufacturing sector, however, both large and smaller firms expect a continued rise in earnings and profits partly supported by solid export performance.
In addition, large nonmanufacturing firms project sustained growth in profits following the favorable results in the manufacturing sector. Some of these profitable firms recently revised their earnings outlook downward because of the recent deceleration in domestic demand. However, on the whole, earnings and profits remain on an upward trend.