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Regional Economic Report (Summary) (January 2012)*

  • 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.

January 16, 2012
Bank of Japan

Compared with the last assessment in October 2011, seven regions (Hokkaido, Hokuriku, Kanto-Koshinetsu, Tokai, Kinki, Chugoku, and Kyushu-Okinawa) reported that the pick-up in their economic activities had paused recently, mainly due to the effects of a slowdown in overseas economies. Specifically, these regions noted that the pace of the pick-up was moderating, the pick-up appeared to be pausing, or the economy had paused.

The Shikoku region, meanwhile, reported that its assessment of the economy had not changed significantly from the previous report, stating that the economy had been on a pick-up trend as a whole, although there appeared to be signs of weakness on the production side.

The Tohoku region also reported that developments in economic activity observed at the time of the last assessment had continued to date, noting that the economy had been recovering as a whole, as evident from the following factors: (1) economic activity in non-stricken areas had exceeded pre-earthquake levels due to the demand stemming from the earthquake disaster; and (2) there were signs of resumption in economic activity even in some of the stricken areas.

Table : Regional Economic Report
Region Assessment in October 2011 Changes
from the
previous
assessment1
Assessment in January 2012
Hokkaido The economy has been picking up as a whole, although some signs of severity are observed. lower right The economy is more or less unchanged, as the pick-up in economic activity is pausing.
Tohoku 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. unchanged 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) there are signs of resumption in economic activity even in some of the stricken areas.
Hokuriku The economy continues to pick up as a whole, although some signs of severity are observed. lower right The economy continues to pick up as a whole, although the pace of the pick-up is moderating in some aspects.
Kanto-Koshinetsu The economy has been picking up steadily, albeit with differences among areas and industries. lower right The pick-up in economic activity appears to be pausing, mainly due to the effects of the slowdown in overseas economies and the appreciation of the yen.
Tokai The economy is picking up. lower right The economy continues to pick up, but the pace of the pick-up is moderating.
Kinki 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. lower right The economy has paused.
Chugoku The economy has been picking up, aided by the removal of supply-side constraints caused by the disaster. lower right The pick-up in economic activity is pausing.
Shikoku The economy has been on a pick-up trend as a whole, although there appear to be some signs of relative weakness. unchanged The economy has been on a pick-up trend as a whole, although there appear to be signs of weakness on the production side.
Kyushu-Okinawa 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. lower right The pace of the pick-up in economic activity has slowed, as the effects of the slowdown in overseas economies are beginning to weigh on 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 for public investment, the Tohoku region reported that it was increasing significantly, and the Kanto-Koshinetsu region reported that it had begun to increase. 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 for business 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, several regions reported that business sentiment had become cautious, reflecting the slowdown in overseas economies and the appreciation of the yen.

Despite the reverse following a sharp increase in demand for some durable goods, six regions (Tohoku, Kanto-Koshinetsu, Tokai, Kinki, Chugoku, and Shikoku) reported a pick-up or continued increase in private consumption, and the Kyushu-Okinawa region reported that consumption had been solid. Background factors in these reports included improvement in consumer sentiment and restoration-related demand in stricken areas. The Hokuriku region, meanwhile, reported that private consumption had stopped declining. The Hokkaido region, on the other hand, reported that the pace of the pick-up in consumption had slowed.

By goods, as for sales at large retail stores, eight regions (Tohoku, Hokuriku, Kanto-Koshinetsu, Tokai, Kinki, Chugoku, Shikoku, and Kyushu-Okinawa) reported there were signs that sales were picking up or had stopped declining mainly due to an improvement in consumer sentiment, while the Hokkaido region reported that there appeared to be a tendency to restrain ordinary household spending due to uncertainty regarding the outlook. All regions reported that automobile sales had been picking up or had been increasing due mainly to the effects of an introduction of fuel-efficient vehicles in addition to the removal of supply-side constraints. Meanwhile, all regions reported that sales 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 for travel-related demand, many regions reported a pick-up or a slower pace of decline, while the Hokkaido region reported that the pace of the pick-up had slowed.

As for housing investment, seven regions (Hokkaido, Tohoku, Kanto-Koshinetsu, Tokai, Chugoku, Shikoku, and Kyushu-Okinawa) reported that it was picking up, and the Kinki region reported there were signs that it had stopped declining. The Hokuriku region, on the other hand, reported that it had been weak.

As for production, most regions reported that it had recently been relatively weak or was more or less unchanged, or that the pace of increase was moderating, mainly due to weaker exports stemming from the slowdown in overseas economies. The Hokuriku region, meanwhile, reported that it had been recovering as a whole.

By industry, four regions (Tohoku, Kanto-Koshinetsu, Tokai, and Kyushu-Okinawa) reported that production in transportation equipment was increasing or production levels were raised, while the Chugoku region reported that firms had somewhat reduced their capacity utilization. Many regions noted that production in general machinery remained at high levels. As for production in iron and steel, the Tokai region reported that it was on an increasing trend, while the Hokkaido region noted that the pace of increase had slowed, and the Hokuriku and Chugoku regions reported that firms had reduced their capacity utilization. Meanwhile, many regions reported that production in electronic parts and devices, as well as chemicals, had been relatively weak.

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

As for the employment situation, most regions reported that it had been improving as a trend. 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 The pace of the pick-up has slowed except for some aspects of consumption Picking up More or less unchanged The employment situation has been picking up moderately, although the situation remains severe. Household income has fallen below the previous year's level, mainly due to a decline in nominal wages per employee
Tohoku Increasing significantly, particularly in construction orders related to the restoration following the disaster Increasing Continues to increase, due partly to the demand stemming from the disaster Has continued to pick up, particularly in owner-occupied homes Has continued to increase, reflecting moves to make up for the reduction in production caused by the disaster, as well as restoration of damaged facilities of firms. However, the pace of increase is moderating, due partly to the slowdown in overseas economies. The employment situation is improving
Hokuriku Has been declining, because large-scale construction orders related to the Hokuriku bullet train had ended Picking up moderately on the whole, particularly in manufacturing, but investment sentiment has become somewhat cautious Has stopped declining on the whole due to the improvement in consumer sentiment Has been weak Has been recovering as a whole, although some effects of the slowdown in overseas economies have been observed The employment situation is picking up moderately. Household income has been above the previous year's level.
Kanto-Koshinetsu Has begun to increase, due partly to demand related to the restoration of damaged social infrastructure in Ibaraki Prefecture Increasing, as moves to restore damaged facilities -- mainly in disaster-stricken areas -- have continued to be observed Has continued to pick up as a whole, although weakness remains in some aspects of consumer behavior Picking up, due mainly to the removal of supply-side constraints stemming from the disaster Has generally been more or less unchanged The employment and household income situation continues to be severe
Tokai Has been on a declining trend Picking up, particularly in manufacturing Picking up on the whole, although weakness is observed in some aspects of consumer behavior Has been solid Has been on an increasing trend, but the pace of increase is moderating Signs of improvement in the employment and household income situation have been observed, reflecting an increase 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 Has recently been relatively weak and inventories have remained at a relatively high level, due partly to the effects of the slowdown in overseas economies While the employment situation remains severe, it 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 Has been on a declining trend Picking up, particularly in manufacturing Picking up as a whole Picking up, albeit with some fluctuations caused by the expiration of various policy measures to enhance home purchasing There are signs that industries are reducing their capacity utilization particularly due to the effects of the slowdown in overseas economies and the appreciation of the yen The rate of effective job offers to applicants has improved somewhat, while the employment situation remains severe. 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 Signs of a pick-up are observed, particularly in automobile sales Has continued to pick up, although it has recently shown signs of some weakness Has been on a pick-up trend as a whole, although it has recently been somewhat weak The employment situation has been on an improving trend. Household income has more or less stopped declining.
Kyushu-Okinawa Declining Has been relatively weak Has been solid as a whole, although some signs of relative weakness are observed Picking up moderately Production is weakening in an increasing number of industries, due to the effects of the floods in Thailand in addition to 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

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