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Regional Economic Report (Summary) (October 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.

October 22, 2012
Bank of Japan

Compared with the last assessment in July 2012, eight regions (Hokkaido, Hokuriku, Kanto-Koshinetsu, Tokai, Kinki, Chugoku, Shikoku, and Kyushu-Okinawa) reported that the pick-up or the recovery in economic activity observed at the time of the last assessment had come to a pause or that the pace had moderated, mainly because overseas economies had moved somewhat deeper into a deceleration phase.
The Tohoku region, meanwhile, reported that the recovery in economic activity observed at the time of the last assessment had continued to date. Although there seemed to be some signs of weakness, the economy had been recovering as a whole, aided mainly by a significant increase in public investment.

Table : Regional Economic Report
Region Assessment in July 2012 Changes
from the
previous
assessment1
Assessment in October 2012
Hokkaido The economy has shown signs of picking up. lower right The economy has recently begun to show signs of weakness, although signs of a pick-up continue to be observed.
Tohoku 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. unchanged Although there seem to be some signs of weakness, the economy has been recovering as a whole, aided mainly by a significant increase in public investment.
Hokuriku The economy continues to pick up as a whole, although the effects of the slowdown in overseas economies have been observed. lower right The economy has been more or less unchanged.
Kanto-Koshinetsu The economy has begun to pick up moderately with firm domestic demand, supported mainly by reconstruction-related demand and improvement in consumer sentiment. lower right The economy has been more or less unchanged.
Tokai The economy has been recovering moderately. lower right The recovery in economic activity has come to a pause.
Kinki The economy continues to pause generally, although there are signs of picking up. lower right The economy continues to pause as a whole, but there seem to be some signs of weakness.
Chugoku The economy is generally more or less unchanged, although there are signs of picking up. lower right The economy is more or less unchanged as a whole, but there seem to be signs of weakness, particularly in production, mainly reflecting a decline in exports.
Shikoku The economy has been picking up. lower right The economy has been on a pick-up trend, but the pace of the pick-up has moderated.
Kyushu-Okinawa The economy is picking up as a whole, although some signs of weakness have continued to be observed. lower right The pace of the pick-up in economic activity has moderated as a whole, mainly due to weaker exports 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 for public investment, the Tohoku region reported that it was increasing significantly, and five regions (Hokuriku, Kanto-Koshinetsu, Kinki, Chugoku, and Shikoku) noted that it was increasing or had begun to pick up. Three regions (Hokkaido, Tokai, and Kyushu-Okinawa) reported that public investment had stopped declining or had generally been more or less unchanged.

As for business fixed investment, eight regions (Hokkaido, Tohoku, Hokuriku, Kanto-Koshinetsu, Tokai, Kinki, Chugoku, and Kyushu-Okinawa) reported that it was increasing or picking up, and the Shikoku region noted that it had been solid.

As for private consumption, three regions (Tohoku, Kanto-Koshinetsu, and Kyushu-Okinawa) reported that it had been solid, and five regions (Hokuriku, Tokai, Kinki, Chugoku, and Shikoku) noted that it had been more or less unchanged or the pick-up had come to a pause. The Hokkaido region, meanwhile, reported that private consumption had recently been somewhat weak.

As for sales at large retail stores, the Kanto-Koshinetsu and Kyushu-Okinawa regions reported that they had been solid, and the Hokuriku and Shikoku regions reported that they had been more or less unchanged. Meanwhile, the Hokkaido region noted that they had recently been somewhat weak and the Tohoku region noted that they were below the previous year's level: background factors in these reports included the effects of the lingering summer heat. The Tokai, Kinki, and Chugoku regions noted that sales at supermarkets were relatively weak.

All regions reported that automobile sales had recently been declining or that the level of sales had fallen, as a result of the ending of subsidies for purchasing energy-efficient cars.

Many regions reported that sales of household electrical appliances, particularly of flat-panel televisions, had been sluggish or were below the previous year's level.

Most regions reported that travel-related demand was picking up or had been firm on the whole, while most recently there were reports that the number of foreign visitors to Japan had declined.

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

As for production, six regions (Hokkaido, Kanto-Koshinetsu, Tokai, Kinki, Chugoku, and Kyushu-Okinawa) reported that it was declining or had been relatively weak, mainly against the background of the slowdown in overseas economies. The Tohoku region noted that it had been more or less unchanged, and the Shikoku region noted that the pace of the pick-up had moderated. The Hokuriku region, meanwhile, noted that production had continued to be at a high level as a whole.

By industry, five regions (Hokkaido, Kanto-Koshinetsu, Tokai, Chugoku, and Shikoku) reported that production in transportation equipment was declining or that production levels were reduced. Many regions also reported that production in general machinery as well as electronic parts and devices had been weak, while five regions (Hokkaido, Hokuriku, Tokai, Chugoku, and Kyushu-Okinawa) reported that there seemed to be some signs of weakness in iron and steel production. Some regions, meanwhile, noted that production in chemicals had been maintained at a high level or had been more or less unchanged, aided partly by firmness in medicinal pharmaceutical products.

Many regions reported that improvement had continued to be observed in the employment and income situation, despite the severity. However, some regions noted that improvement appeared to be pausing.

As for the employment situation, many regions reported that it was recovering or had been on an improving trend. The Hokuriku and Shikoku regions reported that household income was picking up or had been exceeding the previous year's level, while the Tokai and Kinki regions noted that the pick-up had come to a pause or household income had recently been weakening somewhat. Three regions (Hokkaido, Kanto-Koshinetsu, and Chugoku), meanwhile, reported that it had continued to be somewhat weak.

Table :
Region Public investment Business fixed
investment
Private
consumption
Housing
investment
Production Employment and income
Hokkaido Has stopped declining Picking up, particularly in manufacturing Has recently been somewhat weak The pace of the pick-up has slowed Has recently shown signs of weakness The labor market has been picking up moderately amid the severity, but household income has been somewhat weak
Tohoku Increasing significantly, primarily in construction orders related to the restoration following the disaster Increasing Has been solid, although there seem to be signs of weakness in certain items Increasing, partly due to reconstruction demand stemming from the disaster Has been more or less unchanged as a whole, although weakness has been observed in some industries due to the effects of the slowdown in overseas economies The employment situation is recovering
Hokuriku Increasing, particularly in construction orders for facilities related to the Hokuriku bullet train line and construction orders related to the strengthening of elementary and junior high school buildings against earthquakes Picking up, particularly in manufacturing Has been more or less unchanged Has been weak Has continued to be at a high level as a whole, although the effects of the slowdown in overseas economies have been observed The employment situation is picking up.
Household income is picking up.
Kanto-Koshinetsu Has been on an increasing trend, due partly to construction related to the restoration of damaged social infrastructure Increasing, particularly in restoration- and energy-related investment Has been solid Has continued to pick up Has been relatively weak There are signs of improvement in the employment and household income situation, despite the severity
Tokai Has generally been more or less unchanged Increasing steadily The pick-up has come to a pause Has been solid Declining Improvement in the employment and household income situation appears to be pausing
Kinki Increasing Picking up moderately, as corporate profits have shown signs of picking up Has been more or less unchanged Picking up Has been relatively weak due partly to the effects of the slowdown in overseas economies, and inventories have also been at a relatively high level The employment situation has begun to improve gradually, although severity remains. As for wages, scheduled and non-scheduled cash earnings have been solid, but there seem to be signs of weakness in summer bonuses. In light of this situation, with fluctuations smoothed out, household income has generally been more or less unchanged, despite recently weakening somewhat.
Chugoku Has shown signs of picking up Has been picking up so far, particularly in manufacturing The pick-up has come to a pause The pace of the pick-up has moderated Has been relatively weak 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, mainly reflecting firms' cutbacks in personnel expenses.
Shikoku Has begun to pick up Has been solid Has been more or less unchanged Has continued to be relatively weak The pace of the pick-up has moderated, and some firms have shown signs of reducing their production levels The employment and household income situation has been on an improving trend
Kyushu-Okinawa Has stopped declining, as the pace of decline in the related budget has slowed Has shown signs of picking up Has remained solid as a whole Picking up Although production in some industries has been maintained at high levels, production has been relatively weak as a whole, as overseas economies have moved somewhat deeper into a deceleration phase The employment and household income situation has remained severe, but the labor market has been improving as a trend

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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