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Regional Economic Report (Summary) (October 2010) *

  • 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 15, 2010
Bank of Japan

All nine regions in Japan judged that, on the whole, their economies had either recovered at a moderate pace or picked up.  Three regions (Kanto-Koshinetsu, Tokai, and Chugoku), however, reported that the pace of recovery or pick-up had recently slowed mainly due to the waning effects of policy measures and the slowdown in overseas economies.  Meanwhile, some regions referred to the heightened uncertainty regarding the economic outlook.

Many regions continued to point either to the low level of economic activity (Hokkaido, Hokuriku, Kinki, Shikoku, and Kyushu-Okinawa) or to differences in developments among regions or industries (Kanto-Koshinetsu).

Table : Regional Economic Report (Summary) (October 2010)
Region Assessment in July 2010 Difference
between
assessments 1
Assessment in October 2010
Hokkaido The economy is picking up steadily, although economic conditions as a whole remain severe. unchanged The economy has continued picking up, although economic conditions as a whole remain severe.
Tohoku The economy is increasingly showing signs of picking up. unchanged The economy is picking up.
Hokuriku The economy is picking up steadily, although there remains some severity in economic conditions. unchanged The economy has continued picking up as a whole, although there remains some severity in economic conditions.
Kanto-Koshinetsu The economy is recovering moderately, although differences among regions and industries remain. lower right The economy is recovering moderately, but improvements have slowed.  Differences among regions and industries also remain.
Tokai The economy has continued picking up as a whole, as the pace of increase in production has started to accelerate again after slowing temporarily. lower right The economy has continued picking up, but the pace of improvement seems to have recently slowed sharply.
Kinki The economy, with some severity in employment, is recovering moderately. unchanged The economy, with some severity in employment, is recovering moderately.
Chugoku The economy is recovering moderately. lower right The economy is recovering moderately, but the pace of recovery has been slowing.
Shikoku The economy is picking up moderately, although economic conditions as a whole remain severe. unchanged The economy is picking up moderately, although economic conditions as a whole remain severe.
Kyushu-Okinawa The economy is recovering moderately, although differences among regions remain. unchanged The economy is recovering moderately, although the employment and income situation remains severe.
  1. With regard to the difference between assessments, arrows pointing to the upper right and lower right indicate changes in the pace of improvement or deterioration compared with the previous assessments, respectively. For example, an acceleration in the pace of improvement or deceleration in the pace of deterioration is indicated with an arrow pointing to the upper right. A horizontal arrow pointing to the right indicates that the pace of improvement or deterioration in economic conditions has remained unchanged compared with the previous assessments.

Public investment was either starting to decline or declining in all regions.

As for business fixed investment , six regions (Hokkaido, Tokai, Kinki, Chugoku, Shikoku, and Kyushu-Okinawa) noted that it was picking up, had begun to pick up, or that it had increased although remaining at a low level.  Two regions (Hokuriku and Kanto-Koshinetsu) reported that business fixed investment had stopped declining.  Meanwhile, Tohoku noted that it had declined.

By industry, business fixed investment in manufacturing was concentrated in maintenance and replacement investments as well as investments to expand production capacity.  A further increase in investment plans for new products and research and development as well as investment for business rationalization were also reported.  As for nonmanufacturing, regions continued to report large-scale investments in infrastructure-related sub-industries, and some regions reported opening of new stores in retailing.

Six regions (Hokkaido, Tohoku, Hokuriku, Kanto-Koshinetsu, Kinki, and Kyushu-Okinawa) reported that private consumption was picking up or that its decline had been coming to a halt, because the degree of severity in the employment and income situation had eased.  Almost all regions, however, pointed to the drop in sales of passenger cars following a last-minute increase in demand ahead of the expiration of subsidies for purchasers of environmentally friendly cars.  Tokai reported that private consumption seemed to be weakening, Chugoku noted that improvement in private consumption had come to a halt, and Shikoku reported that private consumption remained relatively weak as a whole.

By goods, sales of household electrical appliances increased due to the extremely hot weather and the eco-point system.  As for sales at large retail stores, many regions reported that the year-on-year rate of decline had moderated.  Seven regions (Hokkaido, Tohoku, Hokuriku, Kanto-Koshinetsu, Tokai, Shikoku, and Kyushu-Okinawa) noted that travel-related demand had either increased or stopped decreasing.  Almost all regions reported that sales of passenger cars dropped following the last-minute increase in demand ahead of the expiration of subsidies for purchasers of environmentally friendly cars.

While some regions continued to point out that the level of housing investment  remained low, five regions (Hokkaido, Tohoku, Kanto-Koshinetsu, Tokai, and Shikoku) noted that housing investment was picking up or showing signs of picking up in some types of housing.  In addition, the four other regions (Hokuriku, Kinki, Chugoku, and Kyushu-Okinawa) reported that housing investment had stopped declining.

By type of housing, many regions reported that construction of owned homes was above the previous year's level, and some regions (Kanto-Koshinetsu, Tokai, and Kinki) which include metropolitan areas reported that sales of homes, notably of condominiums, had started picking up.

As for production, four regions (Tohoku, Hokuriku, Shikoku, and Kyushu-Okinawa) continued to report an increase.  Tokai, however, noted that production seemed to have started to decline, and four regions (Hokkaido, Kanto-Koshinetsu, Kinki, and Chugoku) noted that the pace of increase in production had slowed.

By industry, many regions reported that production either decreased or that the pace of increase had slowed in motor vehicles and motor vehicle parts due to the expiration of subsidies for purchasers of environmentally friendly cars and the decrease in exports to the United States.  As for industries such as iron and steel and chemicals, several regions reported that production increases had slowed, while many regions reported an increase in general machinery.  Meanwhile, some regions reported that low production levels had continued in paper and pulp.

The employment and income situation remained severe, but all regions reported that the degree of severity had eased.

As for the employment situation, almost all regions reported that labor market conditions had been improving.  As for household income, all regions reported that it was reaching a bottom.

Table : Regional Economic Report (Summary) (October 2010)
Region Public investment Business fixed
investment
Private
consumption
Housing
investment
Production Employment and income
Hokkaido Declining significantly. Increasing, although remaining at a low level. Continues to show signs of picking up, despite some fluctuations  mainly due to policy effects. Picking up steadily. The pace of the pick-up has slowed. The employment situation has improved moderately.
Household income is showing signs of improvement, with the year-on-year growth in nominal wages per worker increasing slightly, although it remains severe amid continued cutbacks in personnel expenses among firms.
Tohoku Below the previous year's level. Declining. Has begun to show signs of picking up, mainly due to the extremely hot weather, in addition to the effects of policy measures. Remains sluggish, although showing signs of picking up especially in the construction of owned homes. Recovering moderately. The employment situation is heading toward improvement.
Household income has exceeded the previous year's level.
Hokuriku Declining as a whole, mainly because large-scale construction orders related to the Hokuriku bullet train have come to a halt. Has stopped declining, especially in manufacturing. The decline has been coming to a halt as a whole, although there have been signs of waning effects of some policy measures. Has stopped declining, especially in the construction of owned homes. Increasing mainly due to the continued rise in exports, especially to Asian countries such as China. The employment situation remains severe, but labor market conditions have continued to show signs of a moderate improvement.
As for household income, scheduled cash earnings have remained at around the previous year's level. However, special cash earnings have increased slightly -- albeit with monthly fluctuations -- in addition to non-scheduled cash earnings, which have continued to increase especially in manufacturing.
Kanto-Koshinetsu Declining, mainly due to the decrease in construction orders by the central and local (city, ward, town, village) governments. Has stopped declining. Has been picking up amid the slight easing in the degree of severity in the employment and income situation. Starting to pick up, mainly in the construction of homes for sale in the Tokyo metropolitan area. The pace of improvement has slowed. The employment situation continues to be severe, but labor market conditions have been improving moderately.
The decline in household income has been coming to a halt mainly due to the increase in special cash earnings.
Tokai Declining. Has begun to pick up, although remaining at a low level. Seems to be weakening as a whole, due to the significant decrease in sales of passenger cars reflecting the expiration of subsidies for purchasers of environmentally friendly cars. Showing signs of picking up in some types of housing, albeit remaining at a low level. Had been increasing, but seems to have started to decline recently, mainly due to the drop in production in motor vehicles reflecting the expiration of subsidies for purchasers of environmentally friendly cars. The employment and income situation remains severe, but the degree of severity has eased slightly.
Kinki Has begun to decline. Has begun to pick up. Has begun to pick up gradually this summer due to the effects of the extremely hot weather and the last-minute increase in demand prior to the expiration of subsidies for purchasers of environmentally friendly cars. Has stopped declining. Increasing due to the rise in exports and to policy measures promoting sales of energy-efficient household electrical appliances, although the pace of increase has slowed.  Meanwhile, inventories have remained at a low level. As for the employment situation, the decline in wages has been coming to a halt, although employment remains severe with the unemployment rate remaining at a high level.
The year-on-year rate of decline in household income has been moderating.
Chugoku Declining. Picking up mainly in manufacturing. Improvement has come to a halt. Has stopped declining. The pace of increase has been slowing. The employment situation has remained severe, but it has improved slightly as new jobs have been offered especially in manufacturing.
Non-scheduled cash earnings have increased with the pick-up in production, although household income as a whole continues to be weak, mainly reflecting firms' cutbacks in personnel expenses.
Shikoku Declining. Has begun to pick up. Continues to be relatively weak as a whole, mainly reflecting the effects of the recent expiration of some policy measures, although sales of durable goods have remained at a high level due to policy effects. Showing signs of picking up in some types of housing, albeit at a low level. Picking up moderately as a whole. The employment situation remains severe, but the degree of severity has eased slightly.
Household income has more or less stopped declining.
Kyushu-Okinawa Declining. Picking up. More or less unchanged as a whole.  Recently, however, effects of the expiration of subsidies for purchasers of environmentally friendly cars have become increasingly evident. Remaining at a low level. Has been increasing moderately, albeit with some fluctuations. The employment and household income situation has remained severe as a whole, but signs of a slight improvement have been seen.

Appendix: Prefectures Included in Each Region

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

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