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Regional Economic Report (Summary) (October 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.

October 20, 2014
Bank of Japan

Compared with the last assessment in July 2014, the Tohoku region revised its assessment downward by noting that the pace of economic recovery had moderated, but the other eight regions reported that their assessments regarding the pace of economic improvement had remained unchanged.

All regions, including the Tohoku region, reported that the economy had continued to recover or had been recovering moderately as a trend. The background to these reports included the fact that although some weakness on the production side had been observed in some aspects, domestic demand had been firm, and the employment and income situation had been improving steadily. Meanwhile, with regard to private consumption, there were reports that the effects of the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike had been waning on the whole, albeit unevenly.

Table : Regional Economic Report
Region Assessment in July 2014 Changes
from the
previous
assessment1
Assessment in October 2014
Hokkaido 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. unchanged The economy has been recovering moderately as a trend. Meanwhile, the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been easing.
Tohoku 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. lower right 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.
Hokuriku 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. 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, while the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been observed. unchanged The economy has continued to recover moderately as a trend, although some weakness particularly on the production side has been observed due mainly to the effects of the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike.
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, and the effects of the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike have been waning on the whole, albeit somewhat unevenly.
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, 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, although somewhat subdued growth has been observed on the production side. Meanwhile, the effects of the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike have begun to wane on the whole.
Shikoku 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. 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 and other movements have been observed.
Kyushu-Okinawa 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. Meanwhile, the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been easing gradually.
  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, four regions (Tohoku, Kanto-Koshinetsu, Tokai, and Kinki) reported that it was increasing. Five regions (Hokkaido, Hokuriku, Chugoku, 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) reported that it was picking up. Meanwhile, it was reported that business sentiment had been solid, or that it had been more or less unchanged for both manufacturing and nonmanufacturing.

As for private consumption, with improvement in the employment and income situation, the Hokkaido region noted that it was recovering, four regions (Hokuriku, Tokai, Shikoku, and Kyushu-Okinawa) reported that it had been picking up moderately as a trend, and four regions (Tohoku, Kanto-Koshinetsu, Kinki, and Chugoku) noted that it had been resilient as a trend. Meanwhile, several regions reported that the effects of the decline in demand following the front-loaded increase prior to the consumption tax hike had been waning on the whole, albeit unevenly.

As for sales at large retail stores, many regions reported that sales had recently exceeded the previous year's level and the effects of the decline in demand following the front-loaded increase had been waning, or that sales had been firm as a trend.

As for automobile sales, it was reported that the decline in demand following the front-loaded increase had been observed, or that they had been resilient, mainly in new models, despite lingering effects of the decline in demand following the front-loaded increase.

As for sales of household electrical appliances, it was reported that they had continued to pick up as a trend, while the decline in demand following the front-loaded increase and other movements had been observed, or that the year-on-year rate of decline had been diminishing.

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

As for housing investment, five regions (Tohoku, Hokuriku, Tokai, Shikoku, and Kyushu-Okinawa) reported that it had begun to stop declining, or that it had been resilient as a trend, while the effects of the decline in demand following the front-loaded increase prior to the consumption tax hike had been observed. On the other hand, four regions (Hokkaido, Kanto-Koshinetsu, Kinki, and Chugoku) noted that the decline in demand following the front-loaded increase had continued, or that investment had shown some weakness.

As for production (industrial production), three regions (Hokkaido, Hokuriku, and Shikoku) reported that it was increasing or picking up moderately, and three regions (Tokai, Kinki, and Kyushu-Okinawa) noted that it had been more or less flat. On the other hand, the Chugoku region reported that production had been on a moderate increasing trend, albeit at a somewhat subdued pace, and while the effects of factors such as the decline in demand following the front-loaded increase prior to the consumption tax hike had dragged on slightly in durable consumer goods and other goods, the Tohoku and Kanto-Koshinetsu regions noted that it had recently shown some weakness.

With regard to production by industry, the following trends were reported. Electronic parts and devices was increasing, and general-purpose, production and business oriented machinery had continued to be at a high level. Transportation equipment had been more or less flat as a trend or was decreasing due to the decline in demand following the front-loaded increase. Electrical machinery, information and communication electronics equipment, and metal products had recently shown some weakness, mainly since the effects of the decline in demand following the front-loaded increase had been observed. Meanwhile, iron and steel and chemicals 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 steadily or increasing moderately.

Table :
Region Public investment Business fixed
investment
Private
consumption
Housing
investment
Production Employment and income
Hokkaido Has been at a high level Increasing further, reflecting the improvements in sales and profits amid the moderate economic recovery Recovering, on the back of improvement mainly in the employment and income situation Declining 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, primarily in construction orders related to the restoration following the earthquake disaster Increasing Has been resilient on the whole, but the pace of pick-up from the decline in demand following the front-loaded increase in durable consumer goods has been moderate Has been at a high level, mainly due to construction of public housing for disaster-stricken households, while the decline in demand following the front-loaded increase has continued to be observed Has recently shown some weakness, mainly due to the decline in demand following the front-loaded increase The employment and household income situation is improving
Hokuriku Has been at a high level Increasing, particularly in manufacturing Has been picking up moderately as a trend Has begun to stop declining, while the decline in demand following the front-loaded increase has been observed Increasing moderately The employment and household income situation is improving
Kanto-Koshinetsu Increasing Increasing Has been resilient as a trend, and the effects of the decline in demand following the front-loaded increase prior to the consumption tax hike have been waning on the whole, albeit unevenly The decline in demand following the front-loaded increase has continued Has recently shown some weakness Household income is increasing moderately, as supply and demand conditions in the labor market continue to improve steadily
Tokai Increasing Increasing further Has been picking up as a trend amid improvement in the employment and income situation, and the effects of the decline in demand following the front-loaded increase prior to the consumption tax hike have been waning on the whole, albeit somewhat unevenly Has been resilient as a trend, and the effects of the decline in demand following the front-loaded increase prior to the consumption tax hike have begun to wane gradually Has continued to be more or less flat at a relatively high level The employment and household income situation is improving
Kinki Increasing Increasing Seems to be firm as a trend, with the effects of the decline in demand following the front-loaded increase prior to the consumption tax hike having begun to wane gradually and amid improvement mainly in the employment and income situation Has shown some weakness, while the decline in demand following the front-loaded increase prior to the consumption tax hike has continued to be observed Has been firm as a trend, maintaining a relatively high level, while some weakness has been observed in some aspects, mainly due to the decline in demand following the front-loaded increase and weather-related factors Supply and demand conditions in the labor market are improving further. In this situation, household income is improving, with wages exceeding the previous year's level.
Chugoku Has been more or less flat at a high level Picking up Has been resilient as a trend, and the decline in demand following the front-loaded increase prior to the consumption tax hike has been easing Declining somewhat Has been on a moderate increasing trend, albeit at a somewhat subdued pace The employment situation is improving steadily. Household income is picking up steadily.
Shikoku Has been at a high level Picking up Has been picking up moderately as a trend, while the decline in demand following the front-loaded increase prior to the consumption tax hike and other movements have been observed Has been resilient as a trend, while the decline in demand following the front-loaded increase prior to the consumption tax hike and other movements have been observed 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 as a trend, assisted partly by improvement in the employment and income situation on top of favorable consumer sentiment, although effects of the irregular weather have been observed. Meanwhile, the decline in demand following the front-loaded increase prior to the consumption tax hike has been easing gradually. Has been more or less flat Has been more or less flat as a whole Supply and demand conditions in the labor market are improving and household income is picking up moderately

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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