Some 63 percent of major companies expect the country’s economy to grow moderately in 2019, showing less optimism than a year ago, as they brace for a likely drop in consumer demand following a consumption tax hike in October, a Kyodo News survey shows.

In the survey of 115 companies including Toyota Motor Corp. and Sony Corp., conducted between late November and mid-December, 33 percent predicted the economy to be flat while 3 percent said it would retreat slightly.

None of the companies predict strong economic growth. In last year’s survey, 82 percent said the nation’s economy would grow moderately or strongly in 2018.

Responding to a multiple-choice question, with multiple answers allowed, 79 percent of the firms expecting an economic expansion said that a pickup in corporate capital spending would lead the growth, followed by 46 percent that expect an expansion to be supported by an increase in consumer demand before the consumption tax hike to 10 percent from 8 percent on Oct. 1.

As for the companies with more pessimistic views, some 56 percent cited concerns about an anticipated drop in consumer spending from October, while 54 percent said they were concerned about the possible effects of U.S. President Donald Trump’s hard-line trade policies.

Regarding Prime Minister Shinzo Abe’s government, 57 percent said it had their support. While only 2 percent said they did not support the current administration, 39 percent did not provide an answer to the question. Two percent answered “other.”

Regarding Abe’s policies, 33 percent picked promotion of free trade as most important in a multiple-choice question.

Some 43 percent said they were concerned or disappointed with fiscal consolidation efforts, while 30 percent said Abe is not doing enough with regards to social security reform to address the challenges posed by the nation’s aging society and swelling costs to support it.

Expectations were generally high for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership free trade pact, which came into force on Sunday, with 48 percent saying they expect the accord to have a positive impact on their earnings, while 37 percent expect no immediate impact.

The 11-member trade agreement, dubbed the TPP-11, covers 13 percent of the global economy.

It is intended to counterbalance China’s might-is-right approach to commerce in the Asia-Pacific region.

As well as binding countries into a tougher legal framework for trade, lowering tariffs and opening markets, the pact will also introduce new labor standards and force some governments to introduce competition in sectors long dominated by insiders and political influence.