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Regional Economic Report (Summary) (October 2008)*

  • 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.

October 20, 2008
Bank of Japan

According to reports from each of the nine regions in Japan, economic growth had been sluggish in general, mainly due to the effects of earlier increases in energy and materials prices and weaker growth in exports, although there were some regional differences. 

The pace of increase in exports slowed.  Corporate profits continued to decrease mainly due to the deterioration in the terms of trade, and business sentiment became even more cautious.  In this situation, business fixed investment remained more or less flat in some regions, but was generally decreasing recently.  Private consumption was relatively weak, mainly due to sluggish growth in household income and the increase in prices of energy and food.  Meanwhile, housing investment was flat.  Under these circumstances, production was relatively weak.

Assessments showed that regional differences remained: Tokai reported that its economy had continued to be at a high level although it was on a downtrend, while Hokkaido reported that its economy was in a somewhat severe situation.

Compared with the assessment in July 2008, at the time of the last branch managers' meeting, all nine regions revised their assessments downward, mainly reflecting the fact that the weakness in private consumption and production had become widespread (Tohoku, Hokuriku, Tokai, and Chugoku revised their assessments downward, while the remaining five regions revised their assessments slightly downward). 

Table : Regional Economic Report (Summary) (October 2008)
Region [Assessment in October 2008]
Revised upward: none
Unchanged: none
Revised downward: nine regions
Revision of assessment from the previous meeting [Assessment in July 2008]
Revised upward: none
Unchanged: one region
Revised downward: eight regions
Hokkaido The economy is in a somewhat severe situation. Downward. Economic activity is sluggish.
Tohoku Weakness of economic activity is becoming widespread. Downward. The economy seems to have stopped recovering.
Hokuriku Economic growth is sluggish. Downward. The economy is slowing at a somewhat faster pace.
Kanto-Koshinetsu Economic growth is sluggish. Downward. The economy is slowing.
Tokai The economy has continued to be at a high level, although it is on a downtrend. Downward. The economy continues to be at a high level, although the slowdown in the pace of growth has become apparent recently.
Kinki Economic growth is sluggish. Downward. The economy is slowing.
Chugoku Economic activity is more or less flat, although some weakness is observed. Downward. The economy continues to recover gradually as a whole, but the pace of recovery has become slower recently.
Shikoku Economic activity is somewhat weak. Downward. Economic activity is flat.
Kyushu-Okinawa Economic growth is sluggish. Downward. The sluggishness of the economy is becoming increasingly apparent.

Private consumption was "in a somewhat severe situation" or "weak" in the Hokkaido and Chugoku regions, respectively.  Other regions reported that it was "relatively weak" or "weakening."

At large retail stores, sales of apparel, general merchandise, and accessories were relatively weak, while sales of food were firm.  Sales of household electrical appliances were solid, particularly for digital appliances, such as flat-panel televisions.  Sales of passenger cars were weak, mainly due to high gasoline prices.  Travel expenses were also weak, mainly in overseas travel. 

Compared with the previous assessment of private consumption, Hokuriku and Tokai maintained their previous assessments, whereas Tohoku and Chugoku revised their assessments downward, and Hokkaido, Kanto-Koshinetsu, Kinki, Shikoku, and Kyushu-Okinawa revised their assessments slightly downward.  

Table : Regional Economic Report (Summary) (October 2008)
Comparison with  previous assessment Revised upward: none Unchanged: two regions Revised downward: seven regions

As for business fixed investment, some regions reported that "the pace of increase has become slower" or that it was "flat at a high level," while it was notable that several regions reported that it was "declining" or "slightly weak," reflecting the decrease in corporate profits caused mainly by the deterioration in the terms of trade.

Compared with the previous assessment of business fixed investment, Hokkaido, Tohoku, Chugoku, and Shikoku maintained their previous assessments, whereas Hokuriku revised its assessment downward, and Kanto-Koshinetsu, Tokai, Kinki, and Kyushu-Okinawa revised their assessments slightly downward.

Table : Regional Economic Report (Summary) (October 2008)
Comparison with  previous assessment Revised upward: none Unchanged: four regions Revised downward: five regions

Production was reported as being flat or maintaining a relatively high level in the Hokkaido, Chugoku, and Shikoku regions, whereas Tokai reported that it was "declining," and some other regions reported that it was "relatively weak."   

By industry, the following developments were observed, although there were regional differences.  In processing industries, production of electronic parts and devices, transportation equipment, and general machinery was relatively weak.  In materials industries, production of chemicals and textiles was also relatively weak.

Compared with the previous assessment of production, Hokkaido maintained its previous assessment, whereas Tohoku and Hokuriku revised their assessments downward, and Kanto-Koshinetsu, Tokai, Kinki, Chugoku, Shikoku, and Kyushu-Okinawa revised their assessments slightly downward. 

Table : Regional Economic Report (Summary) (October 2008)
Comparison with  previous assessment Revised upward: none Unchanged: one region Revised downward: eight regions

Employment was relatively weak in all regions.  Hokkaido, Kanto-Koshinetsu, Chugoku, Shikoku, and Kyushu-Okinawa reported that it had been "relatively weak" or weakening, or that the improvement had come to a pause.  Tohoku, Hokuriku, Tokai, and Kinki also reported that the ratio of job offers to applicants continued to decline or growth in the number of employees had been relatively weak. 

For household income, regional differences were observed.  Kanto-Koshinetsu, Tokai, Kinki, and Chugoku reported that its growth was relatively weak or flat.  Meanwhile, Hokuriku, Shikoku, and Kyushu-Okinawa reported that it had been slightly weak, and Hokkaido and Tohoku reported that it continued to be in a severe situation or had been declining. 

Compared with the previous assessment of employment, Tohoku maintained its previous assessment, whereas the other eight regions revised their assessments slightly downward.  As for household income, Hokuriku, Kanto-Koshinetsu, Tokai, Shikoku, and Kyushu-Okinawa revised their assessments slightly downward. 

Table : Regional Economic Report (Summary) (October 2008)
Comparison with previous assessment
(employment)
Revised upward: none Unchanged: one region Revised downward: eight regions
Comparison with previous assessment
(household income)
Revised upward: none Unchanged: four regions Revised downward: five regions
Table : Regional Economic Report (Summary) (October 2008)
Region Private
consumption
Business fixed
investment
Production Employment and income
Hokkaido In a somewhat severe situation. Solid. More or less flat. The employment situation is relatively weak.
Household income continues to be in a severe situation as a whole, although it has shown some signs of recovery.
Tohoku Relatively weak. Maintaining a relatively high level. Has been weakening recently. The ratio of job offers to applicants continues to decline, and household income is also declining.
Hokuriku Weakening. Declining. Relatively weak. The number of full-time employees is slightly above the previous year's level, but the ratio of job offers to applicants is on a downtrend.
Household income is below the previous year's level.
Kanto-Koshinetsu Relatively weak, although some firmness is observed. Slightly weak. Relatively weak. The improvement in the employment situation has come to a pause.
Growth in household income has recently been relatively weak.
Tokai Relatively weak, although it remains firm. Flat at a high level. Declining. Labor market conditions have eased.  The ratio of job offers to applicants continues to decline, although it is at a high level.
Household income is relatively weak.
Kinki Relatively weak. The pace of increase has become slower. Relatively weak. The ratio of job offers to applicants continues to decline.  Growth in the number of employees has recently been relatively weak.
Household income remains flat.
Chugoku Weak. Projected to be almost the same as the previous year's level. Flat, although some production cutbacks are observed. The employment situation is weakening as the ratio of job offers to applicants has been on a downtrend recently.
Household income remains more or less flat.
Shikoku Weakening. Declining. Maintaining a relatively high level in general. The weakness in the employment situation has become widespread.
Household income is weakening slightly.
Kyushu-Okinawa Weakening slightly. Starting to lose momentum, although it is still at a high level. Slightly weak. The employment situation is slightly weak.
Household income is slightly weak.

Appendix: Prefectures Included in Each Region

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

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