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Regional Economic Report (Summary) (January 2009)*

  • 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 16, 2009
Bank of Japan

According to reports from each of the nine regions in Japan, economic conditions had been deteriorating.

Exports decreased substantially due to the further slowdown in overseas economies and the appreciation of the yen. Corporate profits continued to decrease, and business sentiment deteriorated. In this situation, business fixed investment remained firm in some regions, but recently decreased as a whole. Private consumption weakened as the employment and income situation became increasingly severe. Meanwhile, housing investment was more or less flat. Under these circumstances, production decreased substantially.

Assessments showed that there were regional differences in the pace of change in economic conditions: Tokai reported that the level of economic activity had been declining rapidly, while other regions reported that economic conditions had been deteriorating or had become increasingly severe, or that weakness in economic activity had become widespread.

Compared with the assessment in October 2008, at the time of the last branch managers' meeting, all nine regions revised their assessments downward, as they did in October, mainly reflecting the fact that private consumption had weakened as the employment and income situation became increasingly severe and also that production had decreased substantially.

Table : Regional Economic Report (Summary) (January 2009)
Region [Assessment in January 2009]
Revised upward: none
Unchanged: none
Revised downward: nine regions
Revision of
assessment
from the
previous
meeting
[Assessment in October 2008]
Revised upward: none
Unchanged: none
Revised downward: nine regions
Hokkaido Economic conditions are becoming increasingly severe. Downward. The economy is in a somewhat severe situation.
Tohoku Economic conditions are deteriorating. Downward. Weakness of economic activity is becoming widespread.
Hokuriku Economic conditions are deteriorating. Downward. Economic growth is sluggish.
Kanto-Koshinetsu Economic conditions are deteriorating. Downward. Economic growth is sluggish.
Tokai The level of economic activity is declining rapidly. Downward. The economy has continued to be at a high level, although it is on a downtrend.
Kinki Economic conditions are deteriorating. Downward. Economic growth is sluggish.
Chugoku Economic conditions are deteriorating. Downward. Economic activity is more or less flat, although some weakness is observed.
Shikoku Weakness in economic activity has become widespread. Downward. Economic activity is somewhat weak.
Kyushu-Okinawa Economic conditions are deteriorating. Downward. Economic growth is sluggish.

Private consumption was "in a severe situation" in the Hokkaido region. Other regions also saw weakness in private consumption, reporting that the "weakness is becoming widespread" or that private consumption was "starting to weaken."

At large retail stores, although sales of food were firm, sales of apparel, general merchandise, and accessories continued to be relatively weak and sales of household electrical appliances recently started to weaken. Sales of passenger cars dropped substantially, and travel expenses were relatively weak in both domestic and overseas travel.

Compared with the previous assessment of private consumption, Hokkaido, Shikoku, and Kyushu-Okinawa revised their assessments slightly downward, and the other six regions revised their assessments downward.

Table :
Comparison with  previous assessment Revised upward: none Unchanged: none Revised downward: nine regions

As for business fixed investment, most regions reported that it was "declining" or "declining at a faster pace," or that downward revisions in fixed investment plans were becoming widespread, reflecting the continued decrease in corporate profits and the deterioration in business sentiment.

Business fixed investment decreased as a whole. By industry, in nonmanufacturing, planned fixed investment in a few regions (Chugoku and Kyushu-Okinawa) was set above the previous fiscal year's level, mainly due to infrastructure-related investment in electric and gas utilities. On the other hand, in manufacturing, moves restraining investment to increase production capacity were becoming widespread, mainly in transportation equipment.

Compared with the previous assessment of business fixed investment, Shikoku maintained its previous assessment, whereas Hokkaido and Kyushu-Okinawa revised their assessments slightly downward and the other six regions revised their assessments downward.

Table :
Comparison with  previous assessment Revised upward: none Unchanged: one region Revised downward: eight regions

Production declined in all regions, although the pace of decline differed: Kanto-Koshinetsu and Kinki reported that it was "declining substantially," and Tokai reported that it "seems to be declining sharply"; other regions such as Hokkaido, Hokuriku, Chugoku, and Kyushu-Okinawa reported that it was declining.

By industry, although there were regional differences, both processing industries (such as electronic parts and devices, transportation equipment, and general machinery) and materials industries (such as iron and steel, and paper and pulp) saw declines across a wide range of sub-industries.

Compared with the previous assessment of production, all nine regions revised their assessments downward (the October assessment in comparison with the July assessment was "unchanged" in one region and "revised downward" in eight regions).

Table :
Comparison with  previous assessment Revised upward: none Unchanged: none Revised downward: nine regions

Employment deteriorated in all regions, mainly since production in the manufacturing sector declined for all regions.

Household income, also started to weaken in all regions, mainly due to the decline in overtime and winter bonus payments.

Compared with the previous assessments of both employment and household income, Hokkaido, Kinki, Shikoku, and Kyushu-Okinawa revised their assessments slightly downward, and the other five regions revised their assessments downward (the October assessment in comparison with the July assessment was "unchanged" in one region and "revised downward" in eight regions for employment; and "unchanged" in four regions and "revised downward" in five regions for household income).

Table :
Comparison with previous assessment
(employment)
Revised upward: none Unchanged: none Revised downward: nine regions
Comparison with previous assessment
(household income)
Revised upward: none Unchanged: none Revised downward: nine regions
Table :
Region Private
consumption
Business fixed
investment
Production Employment and income
Hokkaido In a severe situation. Steady. Declining. The employment situation is somewhat severe.
Household income continues to be in a severe situation as a whole, mainly due to the decline in winter bonus payments reflecting the further deterioration in corporate profits.
Tohoku Weakness is becoming widespread. Declining, mainly in manufacturing. Production cutbacks have been observed across a wide range of industries. Weakness in the employment situation is starting to become widespread. Household income is also declining.
Hokuriku Weakening further. Declining at a faster pace. Declining. The employment situation has become even more severe.
Household income is below the previous year's level, mainly due to the decline in overtime payments.
Kanto-Koshinetsu Starting to weaken. Declining. Declining substantially. The employment situation is deteriorating.
Household income, which has been flat lately, is expected to weaken reflecting the decline in corporate profits and production.
Tokai Relatively weak. Declining, although it is still at a high level. Seems to be declining sharply. Overtime hours worked are decreasing, and the ratio of job offers to applicants also continues to decline.
Household income is relatively weak.
Kinki Weak. Starting to decline, although it is still at a high level. Declining substantially. The ratio of job offers to applicants is declining, and growth in the number of employees is relatively weak.
Household income is weakening.
Chugoku Weakening further as a whole. Downward revisions in fixed investment plans are becoming widespread, although planned fixed investment is set at almost the same level as the previous fiscal year. Declining, and further production cutbacks have been observed lately. The employment situation has become more severe, and the ratio of job offers to applicants has recently dropped sharply.
Household income is weakening.
Shikoku Weakness is becoming widespread. Declining. Weak across a wide range of industries. The employment situation is deteriorating slightly.
Household income is weakening.
Kyushu-Okinawa Weakening. Losing momentum, although it is still at a high level. Declining. The employment situation is relatively weak.
Household income is relatively 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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