BIS Review 142/1996  -2-  The Tankan of November 1996 shows that the corporate profits of principal firms in both the manufacturing (excluding petroleum refining) and non-manufacturing sectors are forecast to continue increasing in fiscal 1996. Profit levels have risen particularly for manufacturing firms; the current profit-to-sales ratio is expected to reach over 4 per cent for the first time in five years.
In these circumstances, business confidence of principal manufacturing firms improved moderately and is forecast to continue its upward trend. In the assembly industry in particular, the percentage differential between firms responding "favorable" and "unfavorable" has turned positive for the first time since February 1992. For non-manufacturing firms, business confidence has strengthened but it is forecast to weaken somewhat in the near future.