A Quarterly Survey of Japanese Business Activities conducted by MITI has revealed that the number of employees of Japanese manufacturers' overseas subsidiaries for October to December 1998 totaled around 1.341 million, a 1.8 percent drop from the same period in the previous year. The survey also shows that this is the second consecutive quarter, following the period from July to September, to show a decline from the previous year. The ministry considers that the scale and number of overseas subsidiaries is likely to continue to fall owing to unpredictable business prospects in the Asian economies. The questionnaire-based survey covers Japanese manufacturing companies with 50 or more employees and capitalization of more than ¥30 million, together with their overseas subsidiaries. The number of respondents totaled about 2,200.
By region, the number of employees in overseas subsidiaries in North America was about 360,000, a 2.6 percent increase from the same period in the previous year, whereas in Asia it was about 720,000, a sharp drop of 3.5 percent. In particular, in the NIEs (South Korea, Taiwan and Singapore) it was about 104,000, a still sharper drop of 13.7 percent. It seems that the crisis in the South Korean economy is affecting local Japanese enterprises as well.
In terms of business categories, the falls in the number of employees in the textile and metal industries are substantial, 14 percent and 8.8 percent, respectively. On the other hand, the general machinery industry saw a 2.8 percent increase, highlighting the differences among industries.
Sales of overseas subsidiaries totaled ¥8,519 billion, a 5.7 percent decline compared with the same period last year. Where particular regions are concerned, all regions but Europe saw a fall in sales in terms of Japanese currency. However, the effect of the strong Japanese yen should be taken into account; in terms of local currencies, sales of subsidiaries in North America increased.
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