Economic Trends Research (July 2011)

A Lastest News about Economic Trends/Outlook in Japan

Last updated: 12 Aug 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 July 2011) Economic DI reached the prequake level of 35.5 while improving for three consecutive months ? The recovery of production activities was clearly recognized while domestic demand was raised by extreme heat and special procurement by energy saving and terrestrial digital broadcasting ? (Respondents: 23,065, Valid responses: 11,006, Response rate: 47.7%, Survey started in May 2002) By industry: Recovery trend becoming clear within ?manufacturing,? especially in automobile related industries The Economic DI (Economic DI: 0?100, 50-point is the threshold of assessment) in July 2011 Seven industries improved, while three industries, including ?agriculture, forestry, rose to 35.5 by 2.3 points from a month earlier, improving for three consecutive months to the fisheries? worsened. pre-disaster level after five months (February 2011: 35.4). However, improvement has been ?Agriculture, forestry, fisheries? (36.2, down 2.0 from a month earlier) As beef suspected hindered by the prolonged nuclear accident, concerns for growing burdens on households, and of being contaminated by radioactive cesium was distributed to markets across the amplified distrust in food safety. Although the domestic economy is steadily improving, country, those industries fell after four months due to the nuclear accident?s domestic demand is showing no self-sustaining strength. adverse effect on agricultural and livestock products. ?Construction? (30.1, up 1.7) Improved for three consecutive months thanks to continued The projected DI was up 1.7 points from this month to 37.2 for ?one month later,? up 2.4 points demand for infrastructure and production facilities such as factories, from recovery needs, as well to 37.9 for ?three months later,? and up 1.3 points to 36.8 for ?six months later.? The domestic as increased investments for seismic retrofits and energy-saving purposes. economy is expected to stay on a mild recovery track, but the recovery pace may be slowing down due to stagnation in domestic demand. ?Manufacturing? (37.9, up 2.7) Improved for three consecutive months as corporate production activities showed a steady recovery in accordance with the recovery of supply chains. ?Retail? (34.4, up 2.9) Improved for four consecutive months. Since the earthquake disaster, Jul.2010 Aug Sep Oct Nov Dec Jan.2011 Feb Mar Economic DI 33.5 33.2 32.7 31.5 32.3 32.9 33.7 35.4 31.6 consumer confidence has been recovering gradually, mostly in necessities; high-priced durable Change from 1.2 ? 0.3 ? 0.5 ? 1.2 0.8 0.6 0.8 1.7 ? 3.8 goods have not seen a full recovery yet. prior month After 1 After 3 After 6 After 1 Economic Apr May Jun July Projected month months months year DI future DI ?Service? (36.8) Rose by 2.6 points from a month earlier. Individual and corporate 30.4 31.4 33.2 35.5 37.2 37.9 36.8 39.7 Change Change from demands both made a mild recovery. The industry improved for three months ? 1.2 1.0 1.8 2.3 from 1.7 2.4 1.3 4.2 prior month July.2011 straight. *1: White columns mean an improvement, yellow-shaded columns mean the value was unchanged, and blue-shaded columns mean a decrease. *2: Economic DIs are calculated based on the structural ARIMA model, in which economic statistics are incorporated to the ARIMA model. ©TEIKOKU DATABANK, LTD. 2011 TDB Economic Trends Research July 2011 1 By size: Large, small-to-mid, micro companies improving for three consecutive months ?Large Firms? stood at 37.7, up 2.6 points from the previous month, ?Small-to-Medium-sized Firms? at 34.8, up 2.2 points, and ?Micro Firms? at 31.9, up 2.0 points. All categories improved for three consecutive months. By region: Reconstruction demand pushed ?Miyagi? up to second place and ?Fukushima? up to seventh nationwide All the 10 areas improved across the country for the first time in five months. ?Tohoku? (35.1, up 3.8 from a month earlier) ? With a steady domestic demand as well as growing reconstruction demand, the construction and manufacturing industries attained remarkable improvement. As a whole, the area grew for the third consecutive month with the second largest improvement of the national 10 areas after ?Tokai.? ?Tokai? (36.3, up 4.5 points) ? Production activities improved, mainly in the automobile related industries or others, leading to great improvement in ?manufacturing? and ?wholesales? within the area. Especially, having suffered a plunge due to a decline in production after the earthquake disaster, ?Aichi? showed a rapid recovery as represented by the 8.2 point increase in ?manufacturing? (43.2), which contributed to raising the entire area to fourth place out of all 47 prefectures nationwide. ©TEIKOKU DATABANK, LTD. 2011 TDB Economic Trends Research July 2011 2 Economic Diffusion Index (Economic DI)1/2 Ratio to the Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Previous Month Total 32.3 33.5 33.2 32.7 31.5 32.3 32.9 33.7 35.4 31.6 30.4 31.4 33.2 35.5 2.3 Large Firms 33.7 35.1 34.8 34.3 33.0 34.1 34.6 35.1 36.9 32.3 31.9 33.1 35.1 37.7 2.6 Small to Medium-sized Firms 31.9 33.0 32.7 32.2 31.0 31.8 32.4 33.3 34.9 31.4 30.0 30.9 32.6 34.8 2.2 Micro Firms 28.2 29.7 28.8 28.8 27.6 28.8 29.5 30.4 31.9 29.0 27.4 28.2 29.9 31.9 2.0 Ratio to the Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Previous Month Agriculture,Forestry,Fisheries 33.7 38.5 36.7 36.2 35.6 35.7 35.2 33.3 37.4 31.9 32.0 32.9 38.2 36.2 ? 2.0 Finance 32.9 34.1 34.4 34.0 32.6 32.6 33.5 33.1 34.2 31.4 30.7 31.0 35.1 34.4 ? 0.7 Construction 24.6 26.1 25.6 26.0 25.2 26.2 26.4 27.3 28.1 26.6 26.1 26.8 28.4 30.1 1.7 Real Estate 32.6 33.4 31.8 33.1 32.6 32.7 33.3 34.7 36.0 30.6 29.2 32.8 33.3 33.9 0.6 Food,Beverages,Livestock Feed 34.1 34.7 33.9 33.6 31.8 32.2 33.0 32.9 33.3 32.3 32.6 33.6 34.5 35.4 0.9 Textile,Textile Products,Clothing 32.8 33.9 31.6 31.4 29.8 31.5 32.5 32.2 36.1 30.6 29.8 30.8 34.8 37.8 3.0 Construction Materials,Furniture, 26.8 27.9 27.7 29.1 28.7 30.8 31.5 31.3 33.3 30.5 28.4 29.4 29.0 32.9 3.9 Ceramics,Stone and Clay Products Pulp, Paper and Paper Products 36.3 35.5 34.8 33.6 32.5 32.9 34.3 33.3 33.2 32.1 31.8 28.6 32.2 34.1 1.9 Publishing,Printing 25.9 26.5 24.9 25.7 23.9 25.7 25.5 27.6 27.2 25.0 24.2 23.2 24.6 25.5 0.9 M 1 40.3 38.4 38.3 38.1 39.6 41.5 37.1 34.4 35.2 38.1 39.7 1.6anufacturing Chemical 40.0 42.4 42. Steel,Nonferrous Metals,Mining 34.1 36.5 35.9 35.6 33.7 34.6 35.0 36.3 38.9 34.8 32.3 31.3 35.0 39.9 4.9 General Machinery 36.0 38.2 38.3 36.7 35.2 36.7 37.6 39.2 43.0 39.5 38.5 39.2 40.8 42.2 1.4 Electrical Machinery 42.5 43.2 42.1 40.8 37.1 38.2 38.7 39.9 41.6 38.1 34.8 36.8 39.6 41.8 2.2 Transportation Machinery,Equipment 43.4 43.7 40.2 39.7 38.4 34.6 34.5 37.2 38.8 27.6 22.4 24.0 32.6 42.1 9.5 Precision Machinery, 40.7 43.8 43.0 42.6 40.2 42.0 41.6 41.7 45.0 42.3 39.5 39.4 43.2 42.9 ? 0.3 Medical Instruments and Equipment Other 29.1 28.0 26.6 27.0 24.3 25.9 28.5 29.9 30.4 28.0 24.0 26.1 24.7 29.7 5.0 Total 35.3 36.7 35.9 35.3 33.4 34.4 34.9 35.9 37.8 34.3 32.4 32.9 35.2 37.9 2.7 Food,Beverages 32.4 32.1 33.2 31.9 31.6 33.3 34.3 32.5 33.5 29.7 29.0 30.7 31.8 33.2 1.4 Textile,Textile Products,Clothing 27.0 29.5 28.6 28.7 27.7 29.1 29.7 29.7 31.2 25.9 27.0 28.6 32.6 34.7 2.1 Construction Materials, Furniture,Ceramics, 24.2 26.0 26.7 27.2 27.3 28.5 30.9 30.6 32.1 29.2 27.2 27.3 28.8 31.4 2.6 Stone and Clay Products Wholesale Paper Products,Stationery,Books 30.1 29.8 28.0 28.9 27.4 26.9 28.0 30.4 31.3 28.4 27.0 25.6 26.1 29.1 3.0 Chemical 39.7 39.3 39.1 37.3 36.7 36.6 37.4 37.3 38.8 35.8 33.5 35.2 34.9 37.0 2.1 Recycled Resources 40.5 35.3 39.7 40.2 35.5 39.7 42.5 42.4 42.3 36.1 34.0 35.8 38.4 39.4 1.0 Steel,Nonferrous Metals, 31.0 32.3 31.7 32.2 30.9 31.6 33.1 34.2 37.1 34.6 32.3 31.0 32.7 35.3 2.6 Mining Products Machinery,Equipment 35.8 37.1 36.8 35.7 34.3 34.8 35.0 36.2 38.6 35.3 34.6 34.8 36.4 38.1 1.7 Other 32.4 34.0 32.9 31.7 30.8 32.0 32.4 33.1 34.5 29.5 28.3 30.3 30.9 33.6 2.7 Total 32.7 33.7 33.5 32.8 31.9 32.7 33.6 34.0 35.8 32.3 31.1 31.7 33.1 35.2 2.1 ©TEIKOKU DATABANK, LTD. 2011 TDB Economic Trends Research July 2011 3 Economic Diffusion Index (Economic DI)2/2 Ratio to the Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Previous Month Food,Beverages 32.5 32.2 31.6 31.9 30.5 32.5 31.1 30.8 33.8 28.4 28.6 29.4 30.7 32.8 2.1 Textile,Textile Products,Clothing 28.3 27.4 26.5 24.3 29.4 30.9 28.6 34.1 34.5 18.7 27.6 28.8 28.2 33.3 5.1 Drugs,Sundries 40.4 41.3 37.5 34.7 38.2 39.9 43.8 41.7 42.0 41.3 38.1 41.3 40.6 47.0 6.4 Furniture 22.2 28.2 26.9 29.5 27.4 29.2 34.4 35.7 39.7 20.8 28.2 33.3 32.1 36.7 4.6 Electrical Household Appliances, Retail Information Machinery and 34.1 35.6 34.5 34.9 33.3 36.4 37.4 38.2 38.6 38.8 34.2 33.3 38.3 40.0 1.7 Equipment Motor Vehicles,Motor Vehicle Parts 35.5 42.6 42.7 31.9 22.4 22.4 23.0 27.2 31.4 25.9 20.5 25.5 29.1 32.1 3.0 Special Merchandise 30.0 31.5 31.1 31.7 28.9 30.3 29.3 30.5 31.4 26.4 28.2 28.5 29.5 31.1 1.6 Various Merchandise 32.2 34.6 35.6 34.6 31.5 30.5 33.1 32.8 36.1 29.2 30.0 34.1 34.6 38.6 4.0 Other 31.0 25.0 23.3 28.6 31.0 23.3 22.2 19.4 26.7 23.3 16.7 30.0 30.0 40.0 10.0 Total 31.8 33.7 33.2 31.8 29.6 30.7 30.7 32.0 34.1 28.1 28.3 30.2 31.5 34.4 2.9 Transportation,Warehousing 33.6 35.2 36.6 35.3 33.9 35.1 36.2 35.7 36.6 32.3 31.0 33.3 33.5 37.5 4.0 Restaurants 31.1 35.3 32.4 35.3 28.6 34.8 33.8 34.7 33.3 27.3 26.2 26.6 33.8 32.9 ? 0.9 Postal,Telecommunications 50.0 51.3 55.6 50.0 50.0 58.3 56.1 55.0 53.6 40.9 39.4 46.7 48.6 48.7 0.1 Electricity,Gas,Water,Heat 31.5 41.7 40.7 38.9 38.9 42.6 44.4 45.8 45.8 44.4 33.3 33.3 38.3 39.6 1.3 Leasing,Rentals 32.6 32.0 32.2 32.3 33.0 32.9 33.0 33.3 35.0 31.3 30.5 33.3 34.9 39.0 4.1 Lodging, Hotels 26.5 26.1 32.4 27.8 26.6 29.3 26.7 28.3 28.1 15.3 10.1 19.0 26.9 32.2 5.3 Recreation 30.2 30.2 31.9 30.7 33.9 31.6 31.9 32.8 32.2 25.7 26.7 33.1 34.4 35.1 0.7 Broadcasting 33.3 36.5 36.5 36.5 40.6 34.4 40.6 34.4 41.1 36.7 26.0 24.4 26.2 32.5 6.3 Service Maintenance,Guarding,Testing 30.6 33.0 35.4 35.5 33.8 33.0 33.9 36.7 37.3 31.1 32.5 31.9 32.6 36.7 4.1 Advertising 25.7 26.9 26.3 26.8 25.7 27.9 27.3 29.7 30.8 21.3 20.6 25.0 25.9 29.1 3.2 Information 35.5 35.5 34.2 33.1 33.2 34.1 34.1 36.4 39.4 34.7 33.5 34.5 35.8 38.0 2.2 Labor Dispatching 31.7 35.2 36.0 35.4 35.4 39.0 38.3 37.5 40.7 32.8 32.4 34.7 37.9 48.7 10.8 Special Services 32.7 32.5 32.5 31.3 30.1 31.7 32.0 33.5 34.6 29.5 29.3 32.4 34.7 35.7 1.0 Medical,Welfare,Public Health 34.7 36.1 35.5 35.6 34.4 31.7 35.2 35.0 36.8 33.7 34.2 33.9 38.1 38.1 0.0 Education 36.5 39.4 38.1 35.8 35.1 35.8 34.3 36.8 42.1 29.2 30.2 32.6 33.3 34.9 1.6 Other 36.9 37.1 36.3 37.1 34.7 35.5 37.4 37.9 39.6 31.6 30.3 32.8 35.7 37.5 1.8 Total 32.9 33.7 33.6 33.1 32.4 33.1 33.5 35.0 36.8 30.7 29.9 32.1 34.2 36.8 2.6 Other 25.6 21.9 26.7 27.0 24.8 27.2 28.3 30.6 31.3 26.7 23.5 29.7 30.7 28.2 ? 2.5 Ratio to the Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Previous Month Hokkaido 27.9 28.9 28.9 28.1 26.8 27.6 26.6 25.8 27.9 25.5 25.2 27.3 28.2 29.7 1.5 Tohoku 28.9 30.9 30.8 30.4 28.5 28.4 29.7 30.7 31.7 24.0 23.5 27.6 31.3 35.1 3.8 32.2 34.4 33.9 33.1 31.0 31.3 31.2 32.9 34.4 28.7 28.1 29.2 32.8 35.5 2.7 kitakanto minamikan 34.0 35.3 34.6 34.0 32.9 34.0 34.4 35.9 37.1 31.5 31.0 32.7 34.6 36.7 2.1to Hokuriku 31.1 31.8 31.9 31.0 30.4 31.8 32.1 32.3 34.5 32.3 31.3 32.2 33.7 36.6 2.9 Tokai 31.6 33.4 33.3 32.5 30.7 31.7 32.8 33.1 35.7 31.9 28.3 28.5 31.8 36.3 4.5 Kinki 32.9 33.7 32.9 33.0 32.3 33.1 33.7 34.7 36.3 34.2 32.8 33.0 33.7 35.2 1.5 Chugoku 31.9 33.0 33.5 32.9 31.6 32.2 33.1 33.7 35.2 33.4 31.9 31.1 32.6 34.8 2.2 Shikoku 32.4 32.8 32.6 32.5 32.6 32.7 34.0 33.0 35.2 34.1 33.7 34.4 33.9 35.5 1.6 Kyushu 31.4 32.1 32.1 32.1 30.5 31.8 33.2 33.0 35.4 33.6 31.8 32.5 33.0 34.1 1.1 ©TEIKOKU DATABANK, LTD. 2011 TDB Economic Trends Research July 2011 4 Appendix 1. Research Subjects Corporations: 23,065 Valid responses: 11,006 Response rate: 47.7% 1.Region Hokkaido 578 Tokai 1,210 Tohoku 579 Kinki 1,801 kitaKanto 712 Chugoku 690 minamikanto 3,689 Shikoku 362 Hokuriku 523 Kyushu 862 Total 11,006 2.Industry (10 Industries 51 Lines of business) Food,Beverages Agriculture,Forestry,Fisheries 47 88 Textile,Textile Products,Clothing Finance 129 48 Drugs,Sundries Construction 1,495 22 R Furnitureeal Estate 285 Ret 15ail Food,Beverages,Livestock Feed 480 Electrical Household Appliances,Information Machinery and Equipment 363 40 Textile,Textile Products,Clothing Motor Vehicles,Motor Vehicle Parts 123 65 Construction Materials,Furniture,Ceramics,Stone and Clay Products Special Merchandise 238 148 Pulp, Paper and Paper Products Various Merchandise 116 66 Publishing,Printing Others 220 5 Chemical Manufac 429 Transportation,Warehousing 419turing 3,223 Steel,Nonferrous Metals,Mining Restaurants 520 38 General Machinery Telecommunications 462 13 Electrical Machinery Electricity,Gas,Water,Heat 360 8 Transportation Machinery,Equipment Leasing,Rentals 101 139 Precision Machinery,Medical Instruments and Equipment Lodging, Hotels 75 45 Others Recreation 100 65 Food,Beverages Broadcasting 399 Se 19rvice Textile,Textile Products,Clothing 1,384 Maintenance,Guarding,Testing 224 152 Construction Materials,Furniture,Ceramics,Stone and Clay Products Advertising 387 144 Paper Products,Stationery,Books Information Wh 122 415olesale 3,959 Chemical Labor Dispatching 341 62 Recycled Resources Special Services 22 230 Steel,Nonferrous Metals,Mining Products Medical,Welfare,Public Health 385 105 Machinery,Equipment Education 1,090 21 Others Others 418 144 Others 39 Total 11,006 3.Size Large Firms 2,572 23.4% Small to Medium-sized Firms 8,434 76.6% micro Firms 2,386 21.7% Total 11,006 45.0% ©TEIKOKU DATABANK, LTD. 2011 TDB Economic Trends Research July 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, capacity A DI over 50 is in the range of ?Good.? A score under 50 is ?Bad.? The number 50 is utilization ratio, number of employees, overtime work hours) the dividing point (?Neither Good or Bad?). All numbers are rounded off to the * Survey on Corporate Attitudes toward Reduction in Summertime Electric Power hundredth. It should be noted that no weight is given to a company?s responses based on its size. Calculations are made according to a ?one company, one vote? Consumption rule. * Survey on Corporate Attitudes toward the Hollowing Out of Industry . For example, all corporations rated ?Very Good?. 3. Research Period and Methodology DI = 6/6x100(%) = 100 Internet-based survey conducted July 19 through 31 , 2011. . All corporations rated ?Neither Good nor Bad?. DI = 3/6x100(%) = 50 The explanation of the Economic Diffusion Index . Research Purpose/Researched Terms Size Classification TDB Economic Trend Research (started from May 2002) is a monthly statistical survey conducted for over 20,000 nationwide corporations on their general business Small to Medium-Sized Firms Industry Large Firms Micro Firms activities including the current condition and future outlook of the industry business (Micro Firms included) Manufacturing and Capital: More than 300 million yen Capital: Below 300 million yen performance and operating climate. The primary purpose of such a survey is to Other Industries* and or No. of Employee: Below 20 No. of Employee: Over 300 No. of Employee: Below 300 assess the current state of Japan?s economy. Wholesale Trade Capital: More than 100 million yen Capital: Below 100 million yen and or No. of Employee: Below 5 Selection of the Subject Corporations No. of Employee: Over 100 No. of Employee: Below 100 Retail Trade Capital: More than 50 million yen Capital: Below 50 million yen and or No. of Employee: Below 5 Companies of all sizes in all domestic industries are eligible to participate in the No. of Employee: Over 50 No. of Employee: Below 50 Service** Capital: More than 50 million yen Capital: Below 50 million yen survey. and or No. of Employee: Below 5 No. of Employee: Over 100 No. of Employee: Below 100 DI Formula 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. The DI (Diffusion Index) is calculated by attaching a number (in parenthesis in 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. diagram below) to each of seven possible responses. Then multiplying the 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 July 2011 6
Posted: 08 August 2011, last updated 12 August 2011

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