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Regional Economic Report (Summary)(October 2005)*

  • This report is based on data and other information gathered for the Bank of Japan's branch managers' meeting held today. The report summarizes the reports from all regional research divisions, mainly at the Bank's branches in Japan, and does not necessarily reflect a consensus of the Bank. The English translation is based on the Japanese original released on October 20, 2005.

October 20, 2005
Bank of Japan

According to reports from each of the nine regions in Japan, the economy is showing a recovery in most regions, although there are differences in the degree of improvement.

Specifically, the recovery is becoming distinct in eight out of nine regions except Hokkaido, since adjustments in production have been completed against the background of improvement in domestic demand. However, there are differences in the degree of improvement among regions, from "continues to expand gradually" in Kinki to "picking up gradually/continues to pick up gradually" in Tohoku and Shikoku.

Compared with the assessment in July 2005, at the time of the last branch managers' meeting, three out of nine regions (Hokkaido, Shikoku, and Kyushu-Okinawa) basically maintained their previous assessment. However, the Kinki region revised its overall assessment upward and the other five regions revised their assessment slightly upward. As the background of the revision, many regions indicated that production was "increasing" or "picking up" due to the completion of adjustments in IT-related sectors, private consumption remained "steady" or was "picking up" reflecting the improvement in the employment and income situation, and housing investment was gradually increasing.

Table : Regional Economic Report (Summary)(October 2005)
Region Assessment in October 2005 Revision of assessment from the previous meetin Assessment in July 2005
Hokkaido Economic activity remains virtually flat. Unchanged. Economic activity remains virtually flat.
Tohoku The economy has been picking up gradually, albeit disparities among areas, industries, and firms. Slightly upward. Economic activity remains virtually flat, although there seem to be some positive movements.
Hokuriku The economy continues to recover gradually. Slightly upward. The economy continues to recover gradually, while recent adjustments mainly in production are subsiding.
Kanto-Koshinetsu The economy is recovering gradually. Slightly upward. The economy is on a gradual recovery trend, while some signs of weakness are diminishing.
Tokai The economy continues a recovery trend. Slightly upward. The economy remains on a recovery trend, and recently seems to be no longer at a pause.
Kinki The economy continues to expand gradually. Upward. The economy continues to be on a recovery trend, while recent adjustments are gradually subsiding.
Chugoku The economy is recovering gradually. Slightly upward. The economy is on a gradual recovery trend, while recent adjustments in some areas are subsiding.
Shikoku The economy continues to pick up gradually, and recently seems to be no longer at a pause in some areas. Unchanged. The economy continues to pick up gradually, and recently seems to be no longer at a pause in some areas.
Kyushu-Okinawa The economy is recovering gradually. Unchanged. The economy continues to recover gradually mainly in manufacturing.

Private consumption has been "increasing" or "recovering" gradually in the Kinki and Tokai regions, and six regions reported that it was "picking up," "steady," or "gradually showing firmness." Meanwhile, the Hokkaido region reported that private consumption had been "flat."

Sales of passenger cars have been basically "picking up" or "solid" in many regions, mainly in new model cars and small passenger cars, although they recently seem to have come to a pause. Sales of household electrical appliances have been either "favorable" or "solid" in all regions. Sales of large-scale retail stores have been relatively weak in the Hokkaido and Tohoku regions, while other regions showed some positive movements on the whole.

Compared with the previous assessment of private consumption, six regions, excluding the Hokkaido, Tohoku, and Shikoku regions, revised their assessment slightly upward, suggesting that private consumption has been basically "steady" or "picking up" in many more regions.

Business fixed investment has continued to be on an increasing trend in all regions.

Compared with the previous assessment on business fixed investment, the Hokuriku region revised its assessment upward, and the Kinki region also made a slight upward revision.

Production has started "increasing" or "following an increasing trend" in the Kinki and Hokuriku regions, and has been "picking up" in the four regions of Kanto-Koshinetsu, Tokai, Chugoku, and Shikoku. The Tohoku region saw some movements toward recovery against the background of the progress in adjustments in IT-related sectors. These seven regions reported the completion of adjustments in IT-related sectors, and either a consequent increase or pickup in production of electrical machinery and electronic parts and devices. On the other hand, the Hokkaido and Kyushu-Okinawa regions reported that production was "decreasing."

Compared with the previous assessment on production, six regions have revised their assessment slightly upward. The Chugoku region maintained its previous assessment, and the Hokkaido and Kyushu-Okinawa regions have revised their assessment slightly downward.

As for the employment and income situation, labor market conditions have continued to improve in all regions. Despite this widespread improving trend, however, the difference in assessment among regions remained substantial, from "ratio of job offers to applicants has been high" in the Tokai region, to the Hokkaido region reporting "improving, although it has remained severe."

Regarding income and wages, the Tohoku region reported that they had been "sluggish," while other regions assessed them to be moving toward improvement, or having "stopped declining," although at mixed paces.

In comparison with the previous assessment on the employment situation, all regions maintained their previous assessment, excluding the Kinki region, which revised its assessment slightly upward. With regard to income, on the other hand, the four regions of Hokkaido, Hokuriku, Kinki, and Chugoku revised their assessment slightly upward.

Table : Regional Economic Report (Summary)(October 2005)
Region Private Consumption Business Fixed Investment Production Employment and Income
Hokkaido Flat. Increasing. Decreasing. The employment situation has been improving, although it has remained severe.
Wages have almost stopped declining.
Tohoku Gradually showing firmness, although lacking in momentum. Increasing mainly in manufacturing. Showing movements toward recovery, reflecting the progress in IT-related adjustments. The employment situation has been on a gradual improving trend on the whole.
Household income has been sluggish as a whole.
Hokuriku Remained on an improving trend. Investment plans for fiscal 2005 were revised further upward, above the previous year's high level. Started following an increasing trend. The employment and wage situation has continued to improve as a whole.
Kanto-Koshinetsu Remained steady. Continued to increase. Picking up. The employment situation has been improving in general.
Household income has continued to increase gradually.
Tokai Recovering gradually. Continued to increase steadily. Picking up. Ratio of job offers to applicants has been high, and the number of full-time employees has been increasing. Household income has been improving.
Kinki Increasing gradually as a whole. Continued to increase. Started increasing. The employment situation has been improving gradually.
Household income has started increasing.
Chugoku Picking up. Increasing. Picking up. The employment situation has continued to improve.
Wages have stopped declining.
Shikoku Remained steady as a whole, albeit with some mixed movements. Continued on a recovery trend, mainly in manufacturing. Picking up gradually. The employment situation has been on a gradual improving trend on the whole.
Regarding wages, total cash earnings have seemed to be above the previous year's level in some areas.
Kyushu-Okinawa Picking up gradually. Increasing mainly in manufacturing. Recently decreasing slightly. The employment situation has continued to be on a gradual improving trend. Regarding household income, total cash earnings have recovered almost to the previous year's level.

Appendix: Prefectures Included in Each Region

Table : Appendix: Prefectures Included in Each Region
Region Prefectures
Hokkaido Hokkaido
Tohoku Miyagi, Aomori, Akita, Iwate, Yamagata, and Fukushima
Hokuriku Ishikawa, Toyama, and Fukui
Kanto-Koshinetsu Tokyo, Chiba, Saitama, Ibaraki, Tochigi, Gunma, Kanagawa, Niigata, Yamanashi, and Nagano
Tokai Aichi, Shizuoka, Gifu, and Mie
Kinki Osaka, Kyoto, Shiga, Nara, Wakayama, and Hyogo
Chugoku Hiroshima, Okayama, Tottori, Shimane, and Yamaguchi
Shikoku Kagawa, Tokushima, Ehime, and Kochi
Kyushu-Okinawa Fukuoka, Saga, Oita, Nagasaki, Kumamoto, Miyazaki, Kagoshima, and Okinawa

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