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Regional Economic Report (Summary) (July 2014)*

  • 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 7, 2014
Bank of Japan

Compared with the last assessment in April 2014, all regions reported that their economic assessments regarding the pace of economic improvement had remained unchanged.

They reported that the economy had continued to recover or had been recovering moderately as a trend, while the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike had been observed. The background to these reports included the fact that domestic demand had been firm, production had been on a moderate increasing trend, and the employment and income situation had been improving.

Table : Regional Economic Report
Region Assessment in April 2014 Changes
from the
previous
assessment1
Assessment in July 2014
Hokkaido The economy has been recovering moderately as a trend, albeit with some fluctuations due to the consumption tax hike. unchanged The economy has been recovering moderately as a trend, while the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been observed in some aspects.
Tohoku The economy has continued to recover as a trend, albeit with some fluctuations due to the consumption tax hike. unchanged The economy has continued to recover as a trend, while the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been observed.
Hokuriku The economy has been recovering moderately as a trend, while it has been affected by the front-loaded increase and subsequent decline in demand prior to and after the consumption tax hike. unchanged The economy has been recovering moderately as a trend, while it has been affected by the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike.
Kanto-Koshinetsu The economy has continued to recover moderately as a trend, albeit with some fluctuations due to the consumption tax hike. unchanged The economy has continued to recover moderately as a trend, while the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been observed.
Tokai The economy has continued to recover as a trend, while the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has recently been observed. unchanged The economy has continued to recover as a trend, while the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has recently been observed.
Kinki The economy has been recovering moderately as a trend, while the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been observed. unchanged The economy has been recovering moderately as a trend, while the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been observed.
Chugoku The economy has been recovering moderately as a trend, albeit with some fluctuations due to the consumption tax hike. unchanged The economy has been recovering moderately as a trend, while the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been observed.
Shikoku The economy has continued to recover moderately as a trend, albeit with some fluctuations due to the consumption tax hike. unchanged The economy has continued to recover moderately as a trend, while the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been observed.
Kyushu-Okinawa The economy has been recovering moderately as a trend, while it has been affected by the front-loaded increase and subsequent decline in demand prior to and after the consumption tax hike. unchanged The economy has been recovering moderately as a trend, while the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been 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 three regions (Hokkaido, Tokai, and Chugoku) noted that it was increasing.  Five regions (Hokuriku, Kanto-Koshinetsu, Kinki, Shikoku, and Kyushu-Okinawa) noted that it had been at a high level.

As for business fixed investment, the Hokkaido and Tokai regions reported that it was increasing further, four regions (Tohoku, Hokuriku, Kanto-Koshinetsu, and Kinki) noted that it was increasing, and three regions (Chugoku, Shikoku, and Kyushu-Okinawa) noted that it was picking up.  Meanwhile, it was reported that business sentiment had deteriorated, particularly in nonmanufacturing, or that it had been solid.

As for private consumption, with improvement in the employment and income situation, the Hokkaido region noted that it was recovering moderately, four regions (Hokuriku, Tokai, Shikoku, and Kyushu-Okinawa) reported that it was picking up moderately or picking up, and four regions (Tohoku, Kanto-Koshinetsu, Kinki, and Chugoku) noted that it had been resilient.  Meanwhile, many regions reported that the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike had been observed, notably in durable consumer goods (such as passenger cars and household electrical appliances) and some high-end goods, or that the subsequent decline in demand following the front-loaded increase was shrinking.

As for sales at large retail stores, many regions reported that for sales at both department stores and supermarkets the subsequent decline in demand following the front-loaded increase had been observed or that such sales were picking up or had been resilient.

As for automobile sales, it was reported that the subsequent decline in demand following the front-loaded increase had been observed or that they had been resilient.

As for sales of household electrical appliances, it was reported that the subsequent decline in demand following the front-loaded increase had been observed or that they were picking up.

Many regions reported that travel-related demand had been firm.  Meanwhile, the Hokkaido and Kyushu-Okinawa regions noted an increase in the number of foreign visitors to Japan.

As for housing investment, although the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike had been observed, three regions (Tohoku, Shikoku, and Kyushu-Okinawa) reported that it had been at a high level.  Four regions (Kanto-Koshinetsu, Tokai, Kinki, and Chugoku) noted that it had been resilient as a trend, and the Hokuriku region reported that it had begun to stop declining.  On the other hand, the Hokkaido region noted that it had begun to decline.

As for production (industrial production), while it had been affected by the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike, four regions (Hokkaido, Tohoku, Kanto-Koshinetsu, and Chugoku) reported that it had been on a moderate increasing trend, and three regions (Hokuriku, Tokai, and Kinki) noted that it had been at a high level or seemed to be firm.  The Shikoku region reported that production was picking up moderately, and the Kyushu-Okinawa region noted that it had been more or less flat as a whole, while progress toward an increase had been observed in some industries.

With regard to production by industry, the following trends were reported.  Transportation equipment and electrical machinery had continued to be more or less flat at a relatively high level. Chemicals had been maintained at a relatively high level.  General-purpose, production and business oriented machinery was increasing or picking up. Electronic parts and devices was picking up. Iron and steel, metal products and ceramics, stone and clay had continued to be at high levels or had been more or less unchanged.

Many regions reported that the employment and income situation was improving.

Many regions reported that supply and demand conditions in the labor market had continued to improve steadily.  As for household income, many regions noted that it was picking up or the improvement was becoming evident.

Table :
Region Public investment Business fixed
investment
Private
consumption
Housing
investment
Production Employment and income
Hokkaido Increasing Increasing further, reflecting the improvements in sales and profits amid the moderate economic recovery Recovering moderately, on the back of improvement mainly in the employment and income situation Has begun to decline Increasing, against the background of firm demand both at home and abroad Supply and demand conditions in the labor market are improving steadily. Household income is recovering.
Tohoku Increasing significantly, primarily in construction orders related to the restoration following the earthquake disaster Increasing Has been resilient, while the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been observed Has been at a high level, mainly due to construction of public housing for disaster-stricken households, albeit with the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike Increasing moderately as a trend, while it has been affected by the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike The employment and household income situation is improving
Hokuriku Has been at a high level Increasing, particularly in manufacturing Picking up moderately as a trend Has begun to stop declining, while the subsequent decline in demand following the front-loaded increase has been observed Has been at a high level The employment and household income situation is improving
Kanto-Koshinetsu Has been at a high level Has been on an increasing trend Has been resilient as a trend, while the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been observed Has been resilient as a trend, while the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been observed Has continued to increase moderately as a trend, while it has been affected by the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike Household income is improving, as supply and demand conditions in the labor market continue to improve steadily
Tokai Increasing Increasing further Picking up as a trend amid improvement in the employment and income situation, while the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has recently been observed Has been resilient as a trend, although the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been observed Has continued to be more or less flat at a relatively high level as a trend, despite having recently shown some production declines in response to the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike The employment and household income situation is improving
Kinki Has been at a high level Increasing Seems to be firm as a trend, amid improvement mainly in the employment and income situation, while the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been observed Seems to be firm as a trend, but the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has continued to be observed Seems to be firm as a trend, despite having shown some production declines due to the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike Supply and demand conditions in the labor market are improving further. In this situation, improvement in household income is also becoming evident.
Chugoku Has been on an increasing trend Picking up Has been resilient, while the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been observed Has been more or less unchanged Has been on a moderate increasing trend The employment situation is improving steadily. Household income is picking up.
Shikoku Has been at a high level Picking up Picking up moderately as a trend, while the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been observed Has been at a high level Picking up moderately Supply and demand conditions in the labor market are improving and household income is picking up moderately
Kyushu-Okinawa Has been at a high level Picking up steadily Has begun to pick up, assisted partly by improvement in the employment and income situation on top of favorable consumer sentiment, while the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been observed Has been losing momentum Has been more or less flat as a whole, while progress toward an increase has been observed in some industries Supply and demand conditions in the labor market are improving and household income has shown signs of picking up

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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