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Regional Economic Report (Summary) (January 2007)*

  • This report summarizes the reports from all regional research divisions, mainly at the Bank's branches in Japan, and is based on data and other information gathered for the Bank of Japan's branch managers' meeting held today. The English translation is based on the Japanese original.

January 12, 2007
Bank of Japan

According to reports from each of the nine regions in Japan, the economy as a whole expanded moderately as all regions remained on an expansion or recovery trend, although there were regional differences.

Specifically, the corporate sector became more buoyant as seen in the fact that business fixed investment was on an increasing trend in all regions and business sentiment improved in most regions. In the household sector, some sluggishness was seen in private consumption due to the unfavorable weather, but the year-end and new-year sales were more buoyant than the previous year in many regions. Housing investment was increasing gradually in many regions, albeit with some fluctuations. Against the background of the increase in domestic and external demand, production continued to increase in most regions. The degree and momentum of economic recovery, however, still varied: Kanto-Koshinetsu, Tokai, and Kinki described the economic activity as expanding, while the other regions described it as being on a recovery trend.

Compared with the assessment in October 2006, at the time of the last branch managers' meeting, all regions maintained their assessments as either expanding or on a recovery trend.

Table : Regional Economic Report (Summary) (January 2007)
Region Assessment in January 2007 Revision of
assessment
from the
previous
meeting
Assessment in October 2006
Hokkaido The economy is picking up gradually. Unchanged. The economy is picking up gradually.
Tohoku The economy continues to recover gradually. Unchanged. The economy continues to recover gradually.
Hokuriku The economy is recovering steadily. Unchanged. The economy is recovering steadily.
Kanto-Koshinetsu The economy is expanding gradually. Unchanged. The economy is expanding gradually.
Tokai The economy is expanding. Unchanged. The economy is expanding.
Kinki The economy continues to expand. Unchanged. The economy continues to expand.
Chugoku The economy continues to recover as a whole. Unchanged. The economy continues to recover as a whole.
Shikoku The economy continues to pick up gradually. Unchanged. The economy continues to pick up gradually.
Kyushu-Okinawa The economy continues to recover. Unchanged. The economy continues to recover.

Private consumption was gradually "increasing" or "recovering" in the Kanto-Koshinetsu, Tokai, and Kinki regions. In other regions, it was "steady," "picking up," or "flat."

Looking at major indicators of consumption, some regions reported that sales at large retail stores were increasing mainly for luxury goods, and food and beverages. Hokkaido, Tohoku, and Kyushu-Okinawa reported sluggish sales of winter clothing due to unusually warm weather. There were also reports that sales of household electrical appliances continued to be favorable, particularly for digital household appliances and high-value-added white goods. However, some regions reported that sales of personal computers and heating equipment were sluggish. Sales of passenger cars remained weak. With regard to tourism, travel expenses remained solid, supported by overseas travel.

The year-end and new-year sales were more buoyant than the previous year in many regions reflecting favorable sales of food and beverages (year-end gifts and traditional Japanese New Year food) and luxury goods.

Compared with the previous assessment of private consumption, Tohoku revised its assessment slightly downward.

Business fixed investment continued to be on an increasing trend in all regions reflecting growth in domestic and external demand and favorable corporate profits. Kanto-Koshinetsu and Chugoku reported that not only large firms but also small and medium-sized ones were actively investing in fixed assets.

Compared with the previous assessment of business fixed investment, Shikoku revised its assessment slightly upward.

Most regions reported that production was "increasing" supported by growing domestic and external demand. Hokkaido and Shikoku reported that production was "picking up gradually" and "recovering gradually," respectively.

By industry, in processing industries, production of electronic parts and devices continued to increase due to brisk demand, although there were reports indicating a decline in orders for and adjustment in production of certain types, especially those for mobile phones. Production of transportation equipment such as automobile-related goods increased mainly due to favorable exports. Production of general machinery also continued to be high. Meanwhile, trends in the materials industries still varied: iron and steel, and paper and pulp maintained a high level of production, while cement, ceramics and glass maintained low levels of production in most regions due to decreasing public investment.

Compared with the previous assessment of production, all regions kept their assessments unchanged.

Most regions reported that the employment and income situation was "improving." However, there were still substantial regional differences in the assessments of labor market conditions, ranging from "the ratio of job offers to applicants is at a high level" in Tokai to an assessment that "the employment situation remains flat" in Hokkaido.

Most regions reported that household income was either increasing or improving, with winter bonuses increasing from the previous year reflecting improvements in labor market conditions and favorable corporate profits. Tohoku reported that "household income is sluggish although the rate of decline compared to the year before is slowing," while Hokkaido reported that it continued to be "somewhat weak."

On the employment and income situation, all regions kept their assessments unchanged.

Table : Regional Economic Report (Summary) (January 2007)
Region Private consumption Business fixed investment Production Employment and income
Hokkaido Flat. Steady. Picking up gradually. The employment situation remains flat.
Household income is somewhat weak.
Tohoku Generally steady, albeit with some sluggishness. Increasing. Increasing. The employment situation continues to be on a recovery trend.
Household income is sluggish although the rate of decline compared to the year before is slowing.
Hokuriku Picking up. Expected to exceed the high level of 2005, mainly in manufacturing. Increasing. The employment situation continues to improve.
Household income is increasing gradually.
Kanto-Koshinetsu On a gradual increasing trend. Increasing steadily. Increasing. The employment situation continues to improve.
Household income continues to increase gradually.
Tokai Recovering gradually. Continues to increase steadily. Increasing. The ratio of job offers to applicants is at a high level, and the number of full-time employees is increasing.
Household income is improving.
Kinki Increasing gradually as a whole. Increasing steadily. Increasing. The employment situation is improving.
Household income is increasing gradually.
Chugoku Picking up. Increasing. Increasing, albeit with some fluctuations. The ratio of job offers to applicants is at a high level.
Household income is increasing gradually.
Shikoku Steady as a whole. Increasing mainly in manufacturing. Recovering gradually. The employment situation continues to improve gradually.
Household income is gradually recovering on the whole.
Kyushu-Okinawa Steady. At a high level. On an increasing trend. The employment situation is improving gradually.
Household income continues to exceed the level of the year before.

Appendix: Prefectures Included in Each Region

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

For further information, please contact:

Regional Economy, Research and Statistics Department
Tel: +81-3-3277-1357