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Regional Economic Report (Summary) (July 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.

July 5, 2012
Bank of Japan

Compared with the last assessment in April 2012, all regions reported that their economic assessments had generally improved from the previous report. Specifically, many regions noted that the economy had been recovering moderately or picking up, while some regions noted that the economy continued to pause generally although there were signs of picking up.

Table : Regional Economic Report
Region Assessment in April 2012 Changes
from the
previous
assessment1
Assessment in July 2012
Hokkaido The economy has been more or less unchanged. upper right The economy has shown signs of picking up.
Tohoku The economy has been recovering as a whole, as evident from the following factors: (1) economic activity in non-stricken areas has been above pre-earthquake levels due to the demand stemming from the disaster; and (2) there are signs of resumption in economic activity even in the stricken areas. upper right The economy has been recovering with a wide range of economic activities exceeding pre-earthquake levels, mainly due to a further rise in demand stemming from the disaster.
Hokuriku The economy continues to pick up as a whole, although the pace of the pick-up is moderating in some aspects. upper right The economy continues to pick up as a whole, although the effects of the slowdown in overseas economies have been observed.
Kanto-Koshinetsu The economy is more or less unchanged, mainly due to the effects of the slowdown in overseas economies and the appreciation of the yen. upper right The economy has begun to pick up moderately with firm domestic demand, supported mainly by reconstruction-related demand and improvement in consumer sentiment.
Tokai The economy has continued to pick up. upper right The economy has been recovering moderately.
Kinki The economy has paused. upper right The economy continues to pause generally, although there are signs of picking up.
Chugoku The economy is more or less unchanged. upper right The economy is generally more or less unchanged, although there are signs of picking up.
Shikoku The economy has been picking up as a whole, as some weakness observed on the production side has begun to ease. upper right The economy has been picking up.
Kyushu-Okinawa The economy continues to pick up as a whole, although the pace of the pick-up remains moderate. upper right The economy is picking up as a whole, although some signs of weakness have continued to be observed.
  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 noted that it was increasing. Four regions (Hokkaido, Tokai, Kinki, and Shikoku) also reported that it had stopped declining. On the other hand, the Chugoku region reported that public investment had been sluggish, and the Hokuriku and Kyushu-Okinawa regions reported it was declining or on a declining trend.

As for business fixed investment, eight regions (Hokkaido, Tohoku, Hokuriku, Kanto-Koshinetsu, Tokai, Kinki, Chugoku, and Kyushu-Okinawa) reported that it was picking up or increasing, and the Shikoku region noted that it had been solid: these regions reported such developments particularly in (1) maintenance and replacement investment and investment in development of new products, as corporate profits were beginning to improve, as well as in (2) restoration-related investment following the disaster.

Seven regions (Tohoku, Kanto-Koshinetsu, Tokai, Kinki, Chugoku, Shikoku, and Kyushu-Okinawa) reported that private consumption had continued to increase, was picking up, or had been firm. The Hokuriku region also reported that it had been solid. Background factors in these reports included (1) the effects of measures to stimulate demand for automobiles and (2) demand stemming from the disaster in the stricken areas. The Hokkaido region, on the other hand, noted that private consumption had been more or less unchanged.

As for sales at large retail stores, many regions reported that they were picking up or had been solid, due partly to steady sales of expensive goods against the background of improvement in consumer sentiment. However, the Tokai and Kinki regions noted that sales at supermarkets were relatively weak.

All regions reported that automobile sales continued to be at high levels or had continued to increase, due mainly to the effects of measures to stimulate demand.

All regions except for the Tohoku region reported that sales of household electrical appliances had been sluggish or declining, as a result of the reverse following a sharp increase in demand, particularly for flat-panel televisions. The Tohoku region, on the other hand, noted that the sales had been firm, partly because replacement demand stemming from the disaster had continued to be observed.

Most regions reported a pick-up in travel-related demand

As for housing investment, the Tohoku region reported that it was increasing, and four regions (Kanto-Koshinetsu, Kinki, Chugoku, and Kyushu-Okinawa) reported that it was picking up. The Tokai region noted that it had been solid. The Hokkaido region, on the other hand, noted that the pace of the pick-up had slowed, and the Hokuriku and Shikoku regions reported that it had been weak.

As for production, the Tohoku and Tokai regions reported that it was increasing; four regions (Hokkaido, Hokuriku, Kanto-Koshinetsu, and Shikoku) reported a pick-up; and the Kinki and Chugoku regions noted that there were some signs of picking up. All these regions pointed to a pick-up in domestic demand as a background factor. The Kyushu-Okinawa region, meanwhile, noted that production had been more or less unchanged as a whole.

By industry, four regions (Hokkaido, Tohoku, Kanto-Koshinetsu, and Tokai) reported that production in transportation equipment was increasing, and the Chugoku region reported that firms had raised their capacity utilization to some extent, while two regions (Shikoku and Kyushu-Okinawa) noted that production had been maintained at high levels. Many regions also reported that production in general machinery as well as iron and steel had continued to be at a high level or was increasing moderately. Meanwhile, production in electronic parts and devices showed mixed developments: the Tohoku and Kanto-Koshinetsu regions reported that it was declining or had been weak; the Chugoku and Kyushu-Okinawa regions noted that it was more or less unchanged; and the Hokkaido, Hokuriku, and Tokai regions reported that it was picking up or had shown signs of picking up.

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

As for the employment situation, many regions reported that it was recovering or that signs of improvement had been observed. Many regions, meanwhile, noted that household income had stopped declining.

Table :
Region Public investment Business fixed
investment
Private
consumption
Housing
investment
Production Employment and income
Hokkaido Has begun to stop declining Picking up, particularly in manufacturing Has been more or less unchanged as a whole, although there are some signs of picking up The pace of the pick-up has slowed Has shown signs of picking up The labor market has been picking up moderately amid the severity, but household income has been somewhat weak
Tohoku Increasing significantly, as construction orders related to the restoration following the disaster have taken hold Increasing Continues to increase, due to the demand stemming from the disaster, as well as the recovery in the employment situation Increasing, partly due to reconstruction demand stemming from the disaster Has been increasing, aided by firm domestic demand and restoration of damaged facilities of firms, although some weakness has been observed in some industries due partly to the effects of the slowdown in overseas economies The employment situation is recovering
Hokuriku Remains on a declining trend, although public investment has exceeded the previous year's level, as construction orders for facilities related to the Hokuriku bullet train have been observed Picking up, particularly in manufacturing Has been solid Has been weak Has been increasing as a whole, although some effects of the slowdown in overseas economies have been observed The employment situation is picking up.
Household income has been above the previous year's level.
Kanto-Koshinetsu Increasing, due partly to construction related to the restoration of damaged social infrastructure Increasing, due to the following factors: restoration-related investment; maintenance and replacement investment; and investment in development of new products, which has begun to be observed.
The latter two investments have benefitted because corporate profits are beginning to pick up.
Increasing moderately as a whole, mainly due to improvement in consumer sentiment and the effects of measures to stimulate demand for automobiles Has continued to pick up Picking up moderately There are signs of improvement in the employment and household income situation, despite the severity
Tokai Has stopped declining Increasing steadily Picking up moderately Has been solid Has been increasing, particularly in automobile-related goods Signs of improvement in the employment and household income situation have been observed, reflecting an increase in production
Kinki Has stopped declining Picking up moderately, as corporate profits have shown signs of picking up Has continued to pick up moderately as a whole Picking up There are some signs of picking up, although production has continued to be relatively weak due partly to the effects of the slowdown in overseas economies. Meanwhile, inventories have been at a relatively high level. 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 change in household income has been more or less unchanged.
Chugoku Has been sluggish Picking up, particularly in manufacturing Picking up as a whole Picking up There are some signs that firms have raised their capacity utilization, although production has been more or less unchanged as a whole The rate of effective job offers to applicants has been more or less unchanged, 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 generally stopped declining Has been solid Picking up Has continued to be relatively weak Has continued to be on a pick-up trend The employment situation has been on an improving trend.
The year-on-year rate of change in household income has been slightly positive.
Kyushu-Okinawa Declining Has exceeded the previous year's level, albeit at a relatively low level Has been firm as a whole, due partly to favorable sales of automobiles and robust demand for travel and tourism Picking up Has remained more or less unchanged as a whole, despite brisk production of motor vehicles and some electronic parts and devices The employment and household income situation has remained severe, but the labor market has been improving as a trend, and household income has generally been at around the previous year's level

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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