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A Characteristic of the Current Adjustments in Economic Activity Indicated in the June Tankan

--adjustments concentrating in the IT-related sector--

August 2000
Koji Nakamura, Hideki Takada

The Economic Commentary series are edited and published by the Bank of Japan's Research and Statistics Department in order to provide material to deepen understandings on economic developments, mid-term economic themes, and economic indicators and statistics. The views expressed in the report are those of the authors and do not necessarily reflect views of the Bank of Japan. The English version of this series is translated by our staff based on the Japanese original.

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Abstract

The Japanese economy has been following a recovery path after it hit the bottom in April 1999. Since the fall of 2000, however, the economy has entered an adjustment phase triggered by the abrupt demand contraction in the IT-related sector worldwide, which is a growing industry.

One of the characteristics of the current adjustment phase is that adjustments in economic activity are broadly concentrated in the IT-sector until present. In the following, we will examine this by using the business conditions of the June Tankan.