Economic Trends Research (August 2011)

An Expert's View about Economic Trends/Outlook in Japan

Last updated: 11 Sep 2011

TDB Economic Trend Research is a monthly statistical survey with over 20,000 nationwide corporations on their business activities including the current condition, future outlook of the industry and operating climate.

TDB Economic Trends Research (Research & Summary for August 2011) ? ? Economic DI fell 0.3 points to 35.2, worsening for the first time in ? four months --The recovery has already begun to weaken due to the exporting environment aggravated by the strong yen and the sluggish growth of domestic demand-- (Respondents: 22,762, Valid responses: 11,070, Response rate: 48.6%, Survey started in May 2002) ? ? ? By industry: While ?retail? remained strong, ?manufacturing? worsened for The Economic DI (Economic DI: 0?100, 50-point is the threshold of assessment) in August the first time in four months? 2011 dropped 0.3 points from a month earlier to 35.2, worsening for the first time in four months. Coupled with the effects of energy saving during this summer, the yen?s record high levels weighed on the Japanese exporting environment, which thus interrupted corporate ?Manufacturing? (36.8, down 1.1 points from a month earlier) Experienced the first activities. The domestic economy has already begun to go out of order due to the exporting downturn in four months as corporate activities were restricted by energy saving during the environment aggravated by the strong yen and the sluggish growth of domestic demand. summer and corporate production and shipping activities stagnated due to the appreciation ? of the yen. ? ? The projected DI was down 0.2 points from this month to 35.0 for ?one month later,? down ?Wholesale? (34.9, down 0.3) Dropped for the first time in four months due to sluggish 0.4 points to 34.8 for ?three months later,? and down 0.7 points to 34.5 for ?six months later.? trading activities as well as deceased profitability caused by the strong yen. W ith the possibility of the domestic economy beginning to level out, there would be a further ?Transportation, Warehousing? (37.1, down 0.4) Worsened for the first time downturn if Japan?s competitiveness in global markets remains weak for a prolonged period in four months as freight movement declined with the stagnation of exporting of time. companies. ? ?Construction? (30.7, up 0.6) Reconstruction demand contributed to a ???? ????? ?? ??? ??? ?? ???? ?? ?? ??? ? ??? ?? ?? ??? ?? ?? ??? ??? ?? remarkable improvement in the construction sector in the Tohoku region ??????? ??? ???? ???? ?? ?? ?? ?? ???? ???? including the disaster-stricken areas. Nationwide, construction continued to ??????? improve for the fourth consecutive month with an increase in demand related ???? ????? ???? ???? ???? ?? ?? ??? ???????? ??? ???? ???? ?? to energy saving and seismic retrofit. ? ?????? ??? ?? ?? ??? ?? ??? ??? ?? ? ???? ??????? ?? ?? ?? ??? ?? ???? ??? ???? ?? ??????? ?Retail? (35.0, up 0.6)?Improved for the fifth consecutive month with a strong ???? ?????????????????????????????????????????????????????????????????? demand in necessities, despite weak resilience. ??????????????????????????????????????????????????????????????????? ? ©TEIKOKU DATABANK, LTD. 2011 ? TDB Economic Trends Research August 2011 1 By size: Large, small-to-mid, micro companies falling for the first time in four months ?Large Firms? was down 0.4 points from the previous month to 37.3. ?Small-to-Medium-sized Firms? down 0.3 points to 34.5 and ?Micro Firms? fell 0.4 points to 31.5. All categories worsened or the first time in four months. ? By region: ?Tohoku? ranked second among 10 regions nationwide, achieving its highest place ever ? ?Kitakanto? (34.6, down 0.9 points from a month earlier) ??Weakened for the first time in four months. Severely affected by the strong yen as well as energy saving during the summer, ?manufacturing? fell 2.9 points, the largest drop among the 10 regions. ?Tohoku? (36.4, up 1.3) ??Improved for the fourth consecutive month thanks to the increase in reconstruction demand, climbing to second place, its record high, among the 10 regions nationwide. Especially, Miyagi? (43.9, up 3.8) ranked at the top of the list of 47 prefectures after two months, and Fukushima? and ?Iwate? also achieved their record highs, ranking fourth and fifth, respectively. Tohoku is continuing to improve with a focus on the disaster-stricken areas. ?Tokai? (36.6, up 0.3) ???Manufacturing,? showing a slight decline, however, came on top among the 10 regions across the country. Besides, ?retail? and ?service? were strong. With these strengths, the Tokai region returned to the top in three years and three months after May 2008. ©TEIKOKU DATABANK, LTD. 2011 ? TDB Economic Trends Research August 2011 2 Economic Diffusion Index (Economic DI)1/2 Ratio to the Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Ju l-11 Aug-11 Previous Month Total ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ???? Large Firms ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ???? Small to Medium-sized Firms ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ???? Micro Firms ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ???? Ratio to the Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Previous Month Agriculture,Forestry,Fisheries ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ??? Finance ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ???? Construction ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ??? Real Estate ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ??? Food,Beverages,Livestock Feed ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ???? Textile,Textile Products,Clothing ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ???? Construction Materials,Furniture, ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ???? Ceramics,Stone and Clay Products Pulp, Paper and Paper Products ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ???? Publishing,Printing ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ??? Manufacturing Chemical ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ???? Steel,Nonferrous Metals,Mining ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ???? General Machinery ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ???? Electrical Machinery ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ???? Transportation Machinery,Equipment ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ??? Precision Machinery, ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ???? Medical Instruments and Equipment Other ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ???? Total ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ???? Food,Beverages ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ??? Textile,Textile Products,Clothing ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ???? Construction Materials, Furniture,Ceramics, ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ??? Stone and Clay Products Wholesale Paper Products,Stationery,Books ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ???? Chemical ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ??? Recycled Resources ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ???? Steel,Nonferrous Metals, ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ??? Mining Products Machinery,Equipment ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ???? Other ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ??? Total ?? ?? ?? ?? ??? ???? ???? ??? ??? ?? ?? ?? ?? ???? ©TEIKOKU DATABANK, LTD. 2011 ? TDB Economic Trends Research August 2011 3 Economic Diffusion Index (Economic DI)2/2 Ratio to the Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Prev ious Month Food,Beverages ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ?? Textile,Textile Products,Clothing ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ?? Drugs,Sundries ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ??? Furniture ? ?? ?? ??? ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ? Electrical Household Appliances, Retail Information Machinery and ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ?? Equipment Motor Vehicles,Motor Vehicle Parts ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ?? Special Merchandise ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ?? Various Merchandise ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ??? Other ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ?? Total ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ?? Transportation,Warehousing ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ??? Restaurants ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ?? Postal,Telecommunications ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ?? Electricity,Gas,Water,Heat ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ?? Leasing,Rentals ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ??? Lodg ing, Hotels ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ?? Recreation ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ??? Broadcasting ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ?? Service Maintenance,Guarding,Testing ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ??? Advertising ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ??? Information ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ?? Labor Dispatching ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ??? Special Services ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ??? Medical,Welfare,Public Health ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ?? Education ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ??? Other ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ??? Total ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ??? Oth er ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ?? Ratio to the Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Ju Aug-11l-11 Previous Month Hokkaido ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ?? Tohoku ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ?? ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ??? kitakanto mi ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ???namikanto Hokuriku ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ??? Tokai ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ?? Kinki ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ??? Chugoku ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ??? Shikoku ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ?? Kyushu ?? ??? ?? ?? ?? ??? ?? ?? ?? ?? ?? ?? ?? ??? ©TEIKOKU DATABANK, LTD. 2011 ? TDB Economic Trends Research August 2011 4 Appendix ? Research Subjects? Corporations: 22,762? Valid responses: 11,070 Response rate: 48.6% 1.Region Hokkaido 575 Tokai 1,207 Tohoku 591 Kinki 1,813 kitaKanto 725 Chugoku 694 minamikanto 3,668 Shikoku 369 H okuriku 551 Kyushu 877 Total 11,070 2.Industry (10 Industries 51 Lines of business) Food,Beverages Agriculture,Forestry,Fisheries 39 93 Textile,Textile Products,Clothing Finance 127 42 Co Drugs,Sundriesnstruction 1,510 17 Furniture Real Estate 288 Re 17tail Food,Beverages,Livestock Feed 480 Electrical Household Appliances,Information Machinery and Equipment 364 41 Textile,Textile Products,Clothing Motor Vehicles,Motor Vehicle Parts 122 64 Construction Materials,Furniture,Ceramics,Stone and Clay Products Special Merchandise 239 146 Pulp, Paper and Paper Products Various Merchandise 125 66 Publishing,Printing Others 215 4 Chemical Ma 416 Transportation,Warehousing 428nufacturing 3,223 Steel,Nonferrous Metals,Mining Restaurants 535 40 General Machinery Telecommunications 467 12 Electrical Machinery Electricity,Gas,Water,Heat 378 8 Transportation Machinery,Equipment Leasing,Rentals 96 146 Precision Machinery,Medical Instruments and Equipment Lodging, Hotels 76 41 Others Recreation 96 68 Food,Beverages Broadcasting 412 Se 19rvice Textile,Textile Products,Clothing 1,384 Maintenance,Guarding,Testing 228 151 Construction Materials,Furniture,Ceramics,Stone and Clay Products Advertising 395 145 Paper Products,Stationery,Books Information Wh 125 424olesale 3,959 Chemical Labor Dispatching 334 62 Recycled Resources Special Services 25 228 Steel,Nonferrous Metals,Mining Products Medical,Welfare,Public Health 391 101 Machinery,Equipment Education 1,080 24 Others Others 418 149 Others 33 Total 11,070 3.Size Large Firms 2,567 23.2% Small to Medium-sized Firms 8,503 76.8% micro Firms 2,413 21.8% Total 11,070 45.0% ©TEIKOKU DATABANK, LTD. 2011 ? TDB Economic Trends Research August 2011 5 2. Research Items *Business Confidence (current, in 3 months, in 6 months, in 1 year) *Business Conditions (sales, purchasing and selling unit price, inventory, A DI over 50 is in the range of ?Good.? A score under 50 is ?Bad.? The number 50 capacity utilization ratio, number of employees, overtime work hours) is the dividing point (?Neither Good or Bad?). All numbers are rounded off to the * Survey on Corporate Attitudes toward Reduction in Summertime Electric hundredth. It should be noted that no weight is given to a company?s responses Power Consumption based on its size. Calculations are made according to a ?one company, one * Survey on Corporate Attitudes towards Yen Appreciation vote? rule. . 3. Research Period and Methodology For example, all corporations rated ?Very Good?. Internet-based survey conducted Aug 19 through 31, 2011. . DI = 6/6 x 100(%) = 100 All corporations rated ?Neither Good nor Bad?. The explanation of the Economic Diffusion Index DI = 3/6 x 100(%) = 50 Research Purpose/Researched Terms . TDB Economic Trend Research (started from May 2002) is a monthly statistical Size Classification survey conducted for over 20,000 nationwide corporations on their general business activities including the current condition and future outlook of the industry Small to Medium-Sized Firms Industry Large Firms Micro Firms business performance and operating climate. The primary purpose of such a (Micro Firms included) Manufacturing and Capital: More than 300 million yen Capital: Below 300 million yen survey is to assess the current state of Japan?s economy. Other Industries* and or No. of Employee: Below 20 No. of Employee: Over 300 No. of Employee: Below 300 Selection of the Subject Corporations Wholesale Trade Capital: More than 100 million yen Capital: Below 100 million yen and or No. of Employee: Below 5 No. of Employee: Over 100 No. of Employee: Below 100 Companies of all sizes in all domestic industries are eligible to participate in the Retail Trade Capital: More than 50 million yen Capital: Below 50 million yen and or No. of Employee: Below 5 survey. No. of Employee: Over 50 No. of Employee: Below 50 Service** Capital: More than 50 million yen Capital: Below 50 million yen and or No. of Employee: Below 5 DI Formula No. of Employee: Over 100 No. of Employee: Below 100 The DI (Diffusion Index) is calculated by attaching a number (in parenthesis in the Note1: Large Firms refer to companies that rank in the top 3% in terms of sales volume according to the type of business, among small to midium-sized corporations excluding micro firms, which are defined in Small and Medium Enterprises Basic Act. diagram below) to each of seven possible responses. Then multiplying the Note2: Small to Medium-Sized Firms refer to companies that rank in the bottom 50% in terms of sales volume according to the type of business, among those not categorized as small to midium-sized corporations in Small to Medium-Sized Enterprises Basic Act. percentage of each response by the appropriate number, and adding the results. Very Moderately Neither Moderately Very Bad Good Bad Bad Good or Bad Good Good ( 0 ) ( 1/6 ) ( 2/6 ) ( 3/6 ) ( 4/6 ) ( 5/6 ) ( 6/6 ) DI=50 0 16.7 33.3 Dividing 66.7 83.3 100 point ©TEIKOKU DATABANK, LTD. 2011 ? TDB Economic Trends Research August 2011 6
Posted: 07 September 2011, last updated 11 September 2011

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