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Regional Economic Report (Summary) (October 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.

October 17, 2016
Bank of Japan

According to reports from regions across Japan, the Tokai region reported that its economy had been expanding moderately, albeit at a somewhat reduced pace, and the other eight regions noted that the economy had continued to recover moderately. These reports were based on the assessments that a virtuous cycle from income to spending had been maintained and the effects of the Kumamoto Earthquake had eased, despite such factors as the effects of the slowdown in emerging economies.

Compared with the last assessment in July 2016, the Chugoku region revised its assessment upward, reporting that downward pressure on production had weakened, as did the Kyushu-Okinawa region, noting that the effects of the Kumamoto Earthquake had eased. On the other hand, the Tokai region revised its assessment downward, reporting that private consumption had shown relatively weak developments in some indicators. The other six regions reported that their assessments regarding the pace of economic improvement had remained unchanged.

Table : Comparison of Previous and Current Assessments by Region
Region Assessment in July 2016 Changes
from the
previous
assessment1
Assessment in October 2016
Hokkaido The economy has been recovering moderately. unchanged The economy has been recovering moderately.
Tohoku The economy has continued its moderate recovery trend, although production has been affected mainly by the slowdown in emerging economies. unchanged The economy has continued its moderate recovery trend, although production has been affected mainly by the slowdown in emerging economies.
Hokuriku The economy has continued to recover, although sluggish movements have been observed in some aspects. unchanged The economy has continued to recover, although sluggish movements have been observed in some aspects.
Kanto-Koshinetsu The economy has continued to recover moderately, although exports and production have been affected mainly by the slowdown in emerging economies. unchanged 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 been expanding at a moderate pace as a trend, despite fluctuations seen in exports and production, due to a plant accident in automobile-related industries and to the effects of the Kumamoto Earthquake. lower right The economy has been expanding moderately, albeit at a somewhat reduced pace.
Kinki The economy has been recovering moderately, although exports and production have been affected by the slowdown in emerging economies. unchanged The economy has been recovering moderately.
Chugoku The economy has continued its moderate recovery trend, although relatively weak movements have been observed in some aspects. upper right The economy has been recovering moderately.
Shikoku The economy has continued to recover moderately. unchanged The economy has continued to recover moderately.
Kyushu-Okinawa The economy has been picking up moderately with the alleviation of supply-side constraints, despite its ongoing weakness, mainly in tourism, following a rapid downshift induced by the Kumamoto Earthquake. upper right The economy has been recovering moderately, with the effects of the Kumamoto Earthquake having eased.
  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, three regions (Hokkaido, Hokuriku, and Kanto-Koshinetsu) reported that it was increasing, and the Tohoku region noted that it had been at a high level. Two regions (Shikoku and Kyushu-Okinawa) reported that it was picking up, and three regions (Tokai, Kinki, and Chugoku) noted that it had bottomed out.

As for business fixed investment, seven regions (Tohoku, Hokuriku, Kanto-Koshinetsu, Tokai, Kinki, Chugoku, and Shikoku) reported that it was increasing, and the Hokkaido region noted that it had been at a high level. On the other hand, the Kyushu-Okinawa region noted that it was declining, although it remained at a relatively high level.

Meanwhile, three regions (Tohoku, Shikoku, and Kyushu-Okinawa) reported that business sentiment was improving. Two regions (Hokuriku and Kanto-Koshinetsu) noted that it had generally stayed at a favorable level, but some cautiousness had been observed in certain industries, and three other regions (Tokai, Kinki, and Chugoku) reported that it was flat. On the other hand, the Hokkaido region noted that it had shown some deterioration.

As for private consumption, five regions (Tohoku, Hokuriku, Kanto-Koshinetsu, Tokai, and Kinki) noted that relatively weak developments had been seen in some indicators. Overall, however, two regions (Hokkaido and Kyushu-Okinawa) reported that it was recovering, two regions (Hokuriku and Shikoku) noted that it was picking up, and five regions (Tohoku, Kanto-Koshinetsu, Tokai, Kinki, and Chugoku) reported that it had been resilient.

As for sales at department stores, affected partly by the irregular weather, many regions reported that they had shown some weakness, notably those of high-end products, or that they had been relatively weak, mainly in apparel. As for sales at supermarkets, notwithstanding reports from some regions mentioning the effects of the irregular weather and increased cautiousness in consumer sentiment, many regions noted that they had been solid, or had continued to improve as a trend, or were picking up. Furthermore, many regions reported that sales at convenience stores were increasing, or had been firm.

As for automobile sales, many regions noted that they were picking up, or were bottoming out, while there were reports that they had been below the previous year's level.

As for sales of household electrical appliances, mixed developments were seen across regions with some noting that they had continued to move steadily, or had been solid, while there also were reports that they had been below the previous year's level due to the effects of the irregular weather.

As for travel-related demand, many regions noted that demand was solid, or had been firm, primarily in domestic travel, while there were reports that it had been relatively weak. Meanwhile, there were reports that it was recovering, assisted in part by a series of measures to boost tourism demand, although the effects of the Kumamoto Earthquake on tourism sites and those on consumer sentiment remained. Moreover, there were reports that the number of foreign visitors to Japan had continued to increase.

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

As for production (industrial production), four regions (Hokkaido, Tokai, Kinki, and Kyushu-Okinawa) reported that it was increasing. Three regions (Tohoku, Hokuriku, and Chugoku) noted that production was more or less flat. Meanwhile, the Shikoku region reported that the pick-up had paused, and the Kanto-Koshinetsu region noted that it had shown somewhat weak movements recently.

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

All regions reported that supply and demand conditions in the labor market had continued to improve steadily, or were tightening. As for household income, all regions noted that it was improving steadily, or was increasing moderately.

Table : Assessments of Components by Region
Region Public investment Business fixed
investment
Private
consumption
Hokkaido Increasing moderately Has been at a high level Recovering on the back of steady improvement in the employment and income situation
Tohoku Has been at a high level, primarily in construction orders related to the restoration following the earthquake disaster Increasing moderately Has been resilient, although relatively weak developments have been seen in some indicators
Hokuriku Increasing, mainly reflecting the progress in construction related to the extension of the route for the Hokuriku Shinkansen Line to Tsuruga Increasing steadily, mainly in infrastructure-related investments in electricity and gas as well as investments to expand the production capacity of industries facing strong demand Picking up, although sluggish movements have been observed in some indicators
Kanto-Koshinetsu Increasing Increasing Has been resilient, although relatively weak developments have been seen in some indicators
Tokai Has bottomed out Increasing significantly Has been resilient, although relatively weak developments have been seen in some indicators
Kinki Has begun to bottom out Has been on an increasing trend Has been resilient, amid improvement in the employment and income situation, although relatively weak developments have been seen in some indicators
Chugoku Has bottomed out Increasing moderately Has been resilient
Shikoku Picking up Increasing moderately Picking up moderately
Kyushu-Okinawa Picking up, assisted mainly by increased orders for large projects Declining as the effects of large-scale investments subsided, although it remains at a relatively high level. Has begun to recover as a whole, due to the recovery brought by a series of measures to boost tourism demand as well as the ongoing replacement demand, mainly for durable goods, seen in areas affected by the earthquake
Table : Assessments of Components by Region
Region Housing investment Production
investment
Employment and income
Hokkaido Picking up moderately Increasing moderately Supply and demand conditions in the labor market are improving steadily; household income is recovering
Tohoku Has been at a high level Has been more or less flat The employment and household income situation is improving
Hokuriku Increasing at above the previous year's level, chiefly in owner-occupied houses Has been more or less flat at a high level The employment and household income situation is improving steadily
Kanto-Koshinetsu Picking up steadily Has shown relatively weak movements recently, due in part to changes in the production system in the transportation equipment industry Household income is increasing moderately, as supply and demand conditions in the labor market continue to improve steadily
Tokai Has continued to pick up, albeit with fluctuations Increasing moderately, due mainly to the recovery in production of automobile-related industries Supply and demand conditions in the labor market are tightening and household income is improving steadily
Kinki Picking up Has turned moderately upward With the number of employees on the rise as well as supply and demand conditions in the labor market continuing to improve, nominal wages are increasing moderately; in this situation, household income is improving further
Chugoku Increasing moderately Has been more or less flat The employment and household income situation has continued to improve steadily
Shikoku Picking up The pick-up has paused Supply and demand conditions in the labor market have continued to improve steadily and household income is picking up moderately
Kyushu-Okinawa Picking up moderately, albeit with fluctuations Increasing steadily at above the pre-earthquake level with moves to step up production, including those to resume and restore production, by an increasing number of firms affected by the Kumamoto Earthquake, and also due in part to increased production driven by overseas demand Supply and demand conditions in the labor market are improving steadily and household income is picking up, albeit with fluctuations

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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