Research and Studies

Home > Research and Studies > BOJ Reports & Research Papers > Regional Economic Report > Regional Economic Report (Summary) (Oct. 2011)

Regional Economic Report (Summary) (October 2011)*

  • 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 meeting of general managers of the Bank's branches held today. The English translation is based on the Japanese original.

October 20, 2011
Bank of Japan

Compared with the last assessment in July 2011, five regions (Hokkaido, Tohoku, Kanto-Koshinetsu, Tokai, and Kyushu-Okinawa) reported that their economies had been picking up, aided mainly by the removal of supply-side constraints. Four regions (Hokuriku, Kinki, Chugoku, and Shikoku) reported that their economies had continued to pick up as a trend, which was more or less unchanged from the assessment in the previous report. A few regions reported that the effects of the slowdown in overseas economies had begun to be observed in some segments of their production activity.

Meanwhile, there were reports which indicated a steady recovery in economic activity since the earthquake disaster: (1) the Tohoku region, which had suffered significant damage from the earthquake disaster, reported that the economy had been recovering as a whole, with economic activity in non-stricken areas exceeding pre-earthquake levels and signs of resumption in economic activity in some of the stricken areas; and (2) the Kanto-Koshinetsu region reported that the economy was picking up steadily.

A few regions, meanwhile, reported that the pace of the pick-up varied among areas, industries, and sizes of business.

Table : Regional Economic Report
Region Assessment in July 2011 Changes
from the
previous
assessment1
Assessment in October 2011
Hokkaido The economy remains under downward pressure due to the disaster, but there have been some signs of a pick-up. upper right The economy has been picking up as a whole, although some signs of severity are observed.
Tohoku Although the economy deteriorated substantially due to the disaster, moves toward the normalization of economic activity are proceeding steadily, albeit with differences among areas, reflecting progress in the restoration of social infrastructure as well as production and business facilities. upper right The economy has been recovering as a whole, as evident from the following factors: (1) economic activity in non-stricken areas has exceeded pre-earthquake levels due to the demand stemming from the disaster; and (2) even in some of the stricken areas there are signs of resumption in economic activity.
Hokuriku The economy has begun to pick up as a whole, although some signs of severity are observed. unchanged The economy continues to pick up as a whole, although some signs of severity are observed.
Kanto-Koshinetsu Although the economy continues to be in a severe condition, there have been signs of a pick-up, albeit with differences among areas and industries, as supply-side constraints ease and household and business sentiment improves. upper right The economy has been picking up steadily, albeit with differences among areas and industries.
Tokai The economy seems to be picking up gradually, although it remains in a severe condition. upper right The economy is picking up.
Kinki The economy is on a moderate recovery trend, but the effects of the disaster have been observed mainly on the production side. unchanged The economy is on a moderate recovery trend, but the effects of the slowdown in overseas economies have begun to be observed in some segments of the economy.
Chugoku The economy is beginning to pick up, as downward pressure on production caused by the disaster has begun to ease. unchanged The economy has been picking up, aided by the removal of supply-side constraints caused by the disaster.
Shikoku The economy has been picking up. Meanwhile, downward pressure observed after the earthquake has been easing. unchanged The economy has been on a pick-up trend as a whole, although there appear to be some signs of relative weakness.
Kyushu-Okinawa The economy has begun to pick up compared with the situation immediately after the earthquake, as downward pressure caused by the effects of the disaster has begun to ease. upper right The economy has continued to pick up as a whole, although there appear to be some signs of relative weakness in private consumption and production.
  1. With regard to the changes from the previous assessment, arrows pointing to the upper right or 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.

As forpublic investment, the Tohoku region reported that it was picking up, and the Kanto-Koshinetsu region reported that it had begun to stop declining. On the other hand, the seven other regions (Hokkaido, Hokuriku, Tokai, Kinki, Chugoku, Shikoku, and Kyushu-Okinawa) reported that public investment had been declining.

As forbusiness fixed investment, seven regions (Hokkaido, Tohoku, Hokuriku, Kanto-Koshinetsu, Tokai, Chugoku, and Shikoku) reported that it was picking up or increasing against the background of an increase in the following: (1) restoration-related investment following the disaster; (2) investment in development of new products; and (3) investment in opening of new stores. The Kinki region, meanwhile, reported that there appeared to be signs of some weakness in business fixed investment as corporate profits had leveled off. The Kyushu-Okinawa region reported that investment had been relatively weak. In the meantime, many regions reported improvements in business sentiment, while some regions reported concerns about the effects of the appreciation of the yen.

Despite the reverse following a sharp increase in demand for some durable goods, six regions (Hokkaido, Tohoku, Kanto-Koshinetsu, Tokai, Kinki, and Chugoku) reported a pick-up or continued increase inprivate consumption, and the Kyushu-Okinawa region reported that consumption had been solid. Background factors in these reports included (1) removal of supply-side constraints, (2) improvement in consumer sentiment, and (3) demand stemming from the disaster in stricken areas. The Hokuriku region, meanwhile, reported that private consumption had stopped declining. The Shikoku region, on the other hand, reported that consumption had been weak due partly to unfavorable weather conditions.

By goods, as forsales at large retail stores, most regions reported there were signs that sales were picking up or had stopped declining mainly due to an improvement in consumer sentiment, while the Shikoku and Kyushu-Okinawa regions reported that weak developments were attributable partly to unfavorable weather conditions. As forautomobile sales, all regions reported signs of a pick-up or a slower pace of decline due mainly to the removal of supply-side constraints. Meanwhile, all regions reported thatsales of household electrical appliances had been declining, mainly reflecting the reverse following a sharp increase in demand, particularly for flat-panel televisions, prior to the termination of analog-TV broadcasting. As fortravel-related demand, most regions reported a pick-up or a slower pace of decline.

As forhousing investment, seven regions (Hokkaido, Tohoku, Kanto-Koshinetsu, Tokai, Chugoku, Shikoku, and Kyushu-Okinawa) reported that it was picking up, and the Hokuriku and Kinki regions also reported that it had stopped declining.

Most regions reported thatproduction was increasing or was picking up reflecting the removal of supply-side constraints. Meanwhile, a few regions reported that the effects of the slowdown in overseas economies had begun to be observed in some segments.

By industry, seven regions (Hokkaido, Tohoku, Kanto-Koshinetsu, Tokai, Chugoku, Shikoku, and Kyushu-Okinawa) reported that production in transportation equipment was increasing or production levels were raised. Four regions (Hokkaido, Tokai, Chugoku, and Kyushu-Okinawa) noted a pick-up in iron and steel as a result of an increase in production in transportation equipment. On the other hand, several regions reported that production in electronic parts and devices, chemicals and general machinery had been relatively weak against the background of the slowdown in overseas economies, as well as inventory adjustment pressure. Meanwhile, the Tohoku region reported that although production levels for iron and steel, paper and pulp, as well as food had remained at low levels due to the significant damage to production facilities in the coastal area along the Pacific Ocean, some firms had gradually resumed production with the restoration of production facilities.

Many regions reported that improvement had been observed in theemployment and income situation, although severity remained.

As for employment situation, many regions reported that it had been improving as a trend, assisted mainly by a pick-up in production. Many regions also reported that household income had stopped declining.

Table :
Region Public investment Business fixed
investment
Private
consumption
Housing
investment
Production Employment and income
Hokkaido On a declining trend Picking up as a whole Signs of a pick-up have been observed Picking up Signs of a pick-up have been observed, reflecting the removal of supply-side constraints The employment situation has been picking up moderately, although the situation remains severe.
Household income has been above the previous year's level.
Tohoku Picking up, reflecting recommencement of construction that had temporarily been suspended after the disaster, in addition to construction orders related to the restoration following the disaster Increasing Continues to increase, due partly to the demand stemming from the disaster Showing signs of picking up, particularly in owner-occupied homes Continues to increase, although it remains below the pre-earthquake level The employment situation is improving, after worsening due to the effects of the disaster.
Household income fell below the previous year's level.
Hokuriku Has been declining, because large-scale construction orders related to the Hokuriku bullet train had ended Picking up moderately, particularly in manufacturing Has stopped declining as a whole due to the improvement in consumer sentiment Has stopped declining and the latest number of housing starts is above the previous year's level Has been recovering as a whole, while overseas economies, particularly emerging economies, continue to grow steadily The employment situation is picking up moderately.
Household income has been above the previous year's level.
Kanto-Koshinetsu Has begun to stop declining Increasing, as moves continue to restore damaged facilities -- mainly in disaster-stricken areas -- and in some cases firms have implemented their initial investment plans, which had been suspended immediately after the earthquake Picking up as a whole, although weakness remains in some aspects of consumer behavior Has begun to pick up, due mainly to the removal of supply-side constraints stemming from the disaster Picking up The employment and household income situation continues to be severe
Tokai Has been on a declining trend Picking up, particularly in manufacturing Picking up as a whole, although weakness remains in some aspects of consumer behavior Picking up, aided partly by various measures to support home purchases Has more or less recovered to the pre-earthquake level, as supply-side constraints have been removed Signs of improvement in the employment and household income situation have been observed, reflecting a pick-up in production
Kinki Declining There appear to be signs of some weakness as corporate profits have leveled off Picking up moderately as a whole There are signs that housing investment has stopped declining as a whole Resuming its increase. However, the effects of the slowdown in overseas economies have begun to be observed in some segments. Meanwhile, inventories have recently been at a relatively high level. The employment situation remains severe, but has been improving gradually, with wages beginning to stop declining. In light of this situation, the year-on-year rate of decline in household income has been moderating.
Chugoku Declining Picking up, particularly in manufacturing Picking up as a whole Picking up Has more or less recovered to the pre-earthquake level, as supply-side constraints have been removed While the employment situation remains severe, signs of a pick-up in the number of new job offers have been observed.
Household income continues to be weak as a whole, mainly reflecting firms' cutbacks in personnel expenses, but has been improving somewhat as a trend.
Shikoku Has been on a declining trend Increasing Although automobile sales have been picking up, private consumption has recently been weak as a whole, due partly to unfavorable weather conditions Has been showing signs of picking up Has been on a pick-up trend as a whole, although there appear to be some signs of relative weakness The employment situation has been improving.
Household income has more or less stopped declining.
Kyushu-Okinawa Declining Has been relatively weak Has been solid as a whole. However, some signs of relative weakness are observed due to (1) the reverse following a sharp increase in demand mainly for televisions, and (2) unfavorable weather conditions Picking up moderately Continues to increase as a whole, led mainly by automobiles, but there are some signs that industries are reducing their capacity utilization against the background of the slowdown in overseas economies and the appreciation of the yen The employment and household income situation has remained severe as a whole, but the labor market is improving somewhat

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

Notice

Please contact below in advance to request permission when reproducing or copying the content of this report for commercial purposes.

Please credit the source when reproducing or copying the content of this report.

Inquiries

Regional Economy, Research and Statistics Department

Tel : +81-3-3277-1357