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Regional Economic Report (Summary) (January 2015)*

  • 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 15, 2015
Bank of Japan

Compared with the last assessment in October 2014, the Hokkaido region revised its assessment downward by noting that some weakness had been observed in some aspects, including the decline in public investment, but the other eight regions reported that their assessments regarding the pace of economic improvement had remained unchanged.

All regions, including the Hokkaido region, reported that the economy had been recovering or recovering moderately as a trend, against the background of firm domestic demand, a pick-up in overseas demand, and the ongoing steady improvement in the employment and income situation.  Meanwhile, with regard to private consumption, many regions noted 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.  As for production, there were reports that it had shown signs of bottoming out, although some weakness had still been observed in some aspects.

Table : Regional Economic Report
Region Assessment in October 2014 Changes
from the
previous
assessment1
Assessment in January 2015
Hokkaido 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. lower right The economy has been recovering moderately, although some weakness has been observed in some aspects. Meanwhile, the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been easing.
Tohoku 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, while the effects of the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike have been waning gradually.
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 continued to recover moderately as a trend. Meanwhile, effects such as those of the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike have been waning on the whole.
Kanto-Koshinetsu 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. unchanged The economy has continued to recover moderately as a trend, and effects such as those of the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike have been waning on the whole.
Tokai 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. 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.
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, 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. 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 and other movements have been observed. unchanged The economy has continued to recover moderately 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.
Kyushu-Okinawa 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. unchanged The economy has been recovering moderately. Meanwhile, the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been easing.
  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 and Kinki regions reported that it was increasing, and four regions (Kanto-Koshinetsu, Chugoku, Shikoku, and Kyushu-Okinawa) noted that it had more or less leveled off at a high level.  On the other hand, three regions (Hokkaido, Hokuriku, and Tokai) reported that it was declining recently, although it remained 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 noted that business sentiment had shown some weakness, mainly in nonmanufacturing, while there were reports that it had been solid, or had continued to be on an improving trend.

As for private consumption, with the employment and income situation continuing to improve steadily, the Hokkaido region noted that it was recovering, despite differences across subregions and industries, four regions (Hokuriku, Tokai, Shikoku, and Kyushu-Okinawa) reported that it had been picking up moderately as a trend, and four other regions (Tohoku, Kanto-Koshinetsu, Kinki, and Chugoku) noted that it had been resilient as a trend.  Meanwhile, many 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.

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

As for automobile sales, it was reported that they had been below the previous year's level, mainly due to the decline in demand following the front-loaded increase, while there were reports that the decline in demand following the front-loaded increase had been easing gradually, or that sales had shown early signs of picking up, affected partly by the introduction of new models.

As for sales of household electrical appliances, it was reported that they had been below the previous year's level, mainly due to the decline in demand following the front-loaded increase, while there were reports that sales had been solid as a trend and the effects of the decline in demand following the front-loaded increase had been waning, or that they had begun to recover steadily.

As for travel-related demand, it was reported that demand had been solid, primarily in domestic travel, or had been firm.  Meanwhile, several regions noted that the number of foreign visitors to Japan had continued to increase.

As for housing investment, four regions (Hokkaido, Kinki, Chugoku, and Kyushu-Okinawa) reported that it was declining, or that it had been weak, mainly due to the effects of the decline in demand following the front-loaded increase prior to the consumption tax hike.  On the other hand, the Kanto-Koshinetsu region noted that investment had recently started to bottom out, although the decline in demand following the front-loaded increase had continued, and the Hokuriku region reported that it had been more or less flat.  Meanwhile, three regions (Tohoku, Tokai, and Shikoku) noted that investment had been at a high level, or that it had been resilient as a trend.

As for production (industrial production), four regions (Hokkaido, Hokuriku, Tokai, and Kinki) reported that it had been at a high level, or that it was increasing, and the Chugoku region reported that it had been on a moderate increasing trend, albeit at a somewhat subdued pace.  Amid the gradual progress in inventory adjustments in durable consumer goods and other goods stemming from effects such as those of the decline in demand following the front-loaded increase, three regions (Kanto-Koshinetsu, Shikoku, and Kyushu-Okinawa) noted that production had been more or less flat as a whole, but a pick-up had been observed in some aspects, or that it had recently started to bottom out.  Meanwhile, the Tohoku region reported that production had continued to be relatively weak.

With regard to production by industry, the following developments were reported. Electronic parts and devices was increasing, and general-purpose, production and business oriented machinery was increasing moderately. Transportation equipment,electrical machinery, and information and communication electronics equipment had continued to show a decline in demand following the front-loaded increase, or had continued to see inventory adjustments take place, while there were reports that they had begun to increase. 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 Declining recently, although it remains at a high level Increasing further, reflecting the improvements in sales and profits amid the moderate economic recovery Recovering, mainly on the back of improvement in the employment and income situation, despite differences across subregions and industries. Meanwhile, consumers have become highly price-sensitive and selective, mainly because consumer sentiment has partly become cautious. Declining Has been at a high level, 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, with the decline in demand following the front-loaded increase in durable consumer goods easing gradually Has been at a high level, as the decline in demand following the front-loaded increase has been easing gradually and also due to construction of public housing for disaster-stricken households Has continued to be relatively weak The employment and household income situation is improving
Hokuriku On a declining trend Increasing, particularly in manufacturing Has been picking up moderately as a trend Has been more or less flat Increasing The employment and household income situation is improving
Kanto-Koshinetsu Has more or less leveled off at a high level Increasing Has been resilient as a trend, and the effects of the decline in demand following the front-loaded increase have been waning on the whole Has recently started to bottom out, although the decline in demand following the front-loaded increase has continued Has recently started to bottom out Household income is increasing moderately, as supply and demand conditions in the labor market continue to improve steadily
Tokai Declining, although it remains at a high level 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 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 Has continued to be more or less flat at a relatively high level The employment and household income situation is improving
Kinki On an increasing trend 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 increasing moderately to 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 With supply and demand conditions in the labor market on an improving trend, household income is improving, as wages have exceeded the previous year's level
Chugoku Has more or less leveled off 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, and the effects of the decline in demand following the front-loaded increase prior to the consumption tax hike have been waning 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, with the employment and income situation improving steadily. Meanwhile, the decline in demand following the front-loaded increase prior to the consumption tax hike has been easing. Has been weak Has been more or less flat as a whole, but a pick-up has been observed in some aspects Supply and demand conditions in the labor market are improving steadily 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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