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Regional Economic Report (Summary) (January 2016)*

* 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 18, 2016
Bank of Japan

Compared with the last assessment in October 2015, the Kinki region revised its assessment downward, reporting that the pace of economic recovery had moderated, whereas the Tokai region revised its assessment upward, mainly on the back of a moderate increase in production.  The other seven regions reported that their assessments regarding the pace of economic improvement had remained unchanged.

Eight regions reported that the economy had been recovering moderately or had continued to recover, and the Tokai region noted that its economy had been expanding at a moderate pace.  These reports were based on the assessments that, on the domestic demand side, business fixed investment had been on a moderate increasing trend and private consumption had been resilient against the background of steady improvement in the employment and income situation, although exports and production had been affected mainly by the slowdown in emerging economies.

Region Assessment in October 2015 Changes
from the
previous
assessment1
Assessment in January 2016
Hokkaido The economy has been recovering moderately. horizontal The economy has been recovering moderately.
Tohoku The economy has been recovering moderately. horizontal The economy has continued to recover moderately, although production has been affected mainly by the slowdown in emerging economies.
Hokuriku The economy has continued to recover. horizontal The economy has continued to recover.
Kanto-Koshinetsu The economy has continued to recover moderately, although exports and production have been affected mainly by the slowdown in emerging economies. horizontal The economy has continued to recover moderately, although exports and production have been affected mainly by the slowdown in emerging economies.
Tokai The economy has continued to recover steadily, due to a significant increase in business fixed investment and to a pick-up in housing investment and private consumption, although exports and production have been affected mainly by the slowdown in emerging economies. upper The economy has been expanding at a moderate pace.
Kinki The economy has been recovering, although exports and production have been affected by the slowdown in emerging economies. lower The economy has been recovering moderately, although exports and production have been affected by the slowdown in emerging economies.
Chugoku The economy has been recovering moderately. horizontal The economy has been recovering moderately.
Shikoku The economy has continued to recover moderately. horizontal The economy has continued to recover moderately.
Kyushu-Okinawa The economy has been recovering moderately. horizontal The economy has been recovering moderately.
1With 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 Kanto-Koshinetsu regions noted that it had been more or less flat, although it remained at a high level.  On the other hand, seven regions (Hokkaido, Hokuriku, Tokai, Kinki, Chugoku, Shikoku, and Kyushu-Okinawa) reported that it was on a declining trend, although it remained at a high level, or was declining moderately.

As for business fixed investment, three regions (Hokkaido, Hokuriku, and Tokai) reported that it was increasing further, or increasing significantly, five regions (Kanto-Koshinetsu, Kinki, Chugoku, Shikoku, and Kyushu-Okinawa) noted that it was increasing moderately, or increasing, and the Tohoku region reported that it had been firm.

Meanwhile, the Hokkaido and Tokai regions noted that business sentiment was improving, and seven regions (Tohoku, Hokuriku, Kanto-Koshinetsu, Kinki, Chugoku, Shikoku, and Kyushu-Okinawa) reported that it had generally stayed at a favorable level, although some cautiousness had been observed in some industries.

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

As for sales at department stores and supermarkets, many regions reported that they had been firm, or were picking up.

As for automobile sales, it was noted that they had been below the previous year's level, while there were reports that they had generally been more or less flat, or had been solid.

As for sales of household electrical appliances, it was noted that recovery had been sluggish, while there were reports that sales had been solid, or were picking up, or were recovering moderately.

As for travel-related demand, it was noted that demand had been somewhat weak, while there were reports that it had been solid, primarily in domestic travel, or had been firm as a whole.  Meanwhile, several regions noted that the number of foreign visitors to Japan had continued to increase.

As for housing investment, the Tohoku region reported that it had been at a high level, and eight regions (Hokkaido, Hokuriku, Kanto-Koshinetsu, Tokai, Kinki, Chugoku, Shikoku, and Kyushu-Okinawa) noted that it had begun to pick up, or was picking up.

As for production (industrial production), five regions (Tohoku, Kanto-Koshinetsu, Kinki, Chugoku, and Kyushu-Okinawa) reported that it was weakening, or had continued to be more or less flat, due mainly to the effects of the slowdown in emerging economies.  Meanwhile, four regions (Hokkaido, Hokuriku, Tokai, and Shikoku) reported that it was picking up moderately, or had been at a high level, or was increasing moderately.

With regard to production by industry, the following developments were reported.  Transportation equipment had shown a pick-up, or was increasing moderately, while there were reports that it had been more or less flat.  General-purpose, production and business oriented machinery, electronic parts and devices, and electrical machinery were increasing moderately, while there were reports that they were weakening, or had been more or less flat.  Meanwhile, chemicals had been at a high level, while iron and steel had continued to cut back on production.

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, or were tightening.  As for household income, many regions noted that it was improving steadily, or increasing moderately.

Region Public investment Business fixed
investment
Private
consumption
Housing
investment
Production Employment and income
Hokkaido Declining Increasing further, reflecting the improvements in sales and profits amid the moderate economic recovery Recovering on the back of steady improvement in the employment and income situation Picking up moderately Increasing at a subdued pace Supply and demand conditions in the labor market are improving steadily. Household income is recovering.
Tohoku Has been at a high level, primarily in construction orders related to the restoration following the earthquake disaster Has been firm Has been resilient Has been at a high level Weakening The employment and household income situation is improving
Hokuriku On a declining trend Increasing steadily Picking up Picking up Has been at a high level The employment and household income situation is improving steadily
Kanto-Koshinetsu Has been more or less flat, although it remains at a high level Increasing Has been resilient Picking up Has continued to be more or less flat, due mainly to the effects of the slowdown in emerging economies and due partly to inventory adjustments Household income is increasing moderately, as supply and demand conditions in the labor market continue to improve steadily
Tokai On a declining trend, although it remains at a high level Increasing significantly Picking up Picking up Increasing moderately Supply and demand conditions in the labor market are tightening and household income is improving steadily
Kinki Starting to decline Increasing Has been firm as a whole, amid improvement mainly in the employment and income situation, although recovery has been sluggish in some aspects Has begun to pick up Has recently been more or less flat. Meanwhile, inventories have been at a somewhat high level. With supply and demand conditions in the labor market continuing to improve, household income is improving further
Chugoku Declining moderately Increasing moderately Has been resilient Picking up Has been more or less flat as a whole The employment and household income situation has continued to improve steadily
Shikoku Starting to trend downward, although it remains at a high level Increasing moderately Has been picking up moderately as a trend, although some weakness has temporarily been observed due to relatively high temperatures Has begun to pick up Picking up moderately Supply and demand conditions in the labor market are improving steadily and household income is picking up moderately
Kyushu-Okinawa Declining moderately Increasing Picking up moderately as a whole, amid steady improvement in the employment and income situation as well as in consumer sentiment, although some weakness has been observed in some aspects Picking up Has been more or less flat as a whole, since production for the overseas market has continued to show some weakness, primarily in semiconductor-related production, due mainly to the effects of the slowdown in emerging economies, while production for the domestic market has shown a pick-up Supply and demand conditions in the labor market are improving steadily, and household income is picking up moderately, albeit with some fluctuations

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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