General Summary of Regional Economic and Industrial Research Results (from July to September 2015) (2/2)

Transcription

1 General Summary of Regional Economic and Industrial Research Results (from July to September 2015) (1/2) Reference 2 The overall assessment remains the same as that in the previous quarter. As for the assessments for each economic region, that for Hokkaido has been revised upward from the previous quarter, those for Tohoku, Kanto, Tokai, Hokuriku, Chugoku, Kyushu, and Okinawa remain the same as in the previous quarter, and those for Kinki and Shikoku have been revised downward from the previous quarter. Production: In the automobile industry, production remains steady in Hokkaido, Kanto, Tokai, and Chugoku, mostly because of exports to North America, while domestic demand continues to be in a weak state due to the effects of the light motor vehicle tax hike and other factors. In the electronic parts and devices industry, production for smartphones is in a weak state in Hokkaido, Tokai, Hokuriku, and Chugoku due to the Chinese economy and other factors. Meanwhile, production in the general-purpose, manufacturing, and business-oriented machinery industries has remained steady in Kanto, Tokai, Chugoku, Shikoku, and Kyushu mainly because of exports. As for prospects, there are concerns about the stagnation of other economies such as the Chinese economy. Business investment: In the manufacturing industries, business investment continued to be centered on the maintenance and renewal of equipment nationwide from the previous quarter, and there were some movements in investment for production capacity enhancement. In nonmanufacturing industries, movements toward opening new stores and remodeling existing stores have continued to be seen nationwide in the retail industry, while some retailers in Tohoku and Kyushu responded that they are concerned about the effects of soaring construction costs and a decrease in suitable available properties on their plans to open new stores.

2 General Summary of Regional Economic and Industrial Research Results (from July to September 2015) (2/2) Employment situation: In the manufacturing industries, although some companies have secured an appropriate number of employees, some other companies continued to face a labor shortage from the previous quarter and are eager to secure employees to compensate for increases in production and orders through expanding employment and other means. Also, in nonmanufacturing industries, a labor shortage continues in the retail, services, and construction industries on a nationwide basis, and some respondents stated that the situation will continue in the future. Private consumption: Sales, mainly of foods and beverages at supermarkets and sales of luxury goods at department stores remain steady. Meanwhile, budget-minded attitudes still persist for daily necessities. Sales of home appliances, particularly seasonal home appliances including air conditioners, are brisk, and also sales of large home appliances show some movement. In sales of automobiles, the effects of the light motor vehicle tax hike can be seen. Some respondents pointed out that consumption by foreign tourists is brisk in Hokkaido, Kanto, Tokai, Hokuriku, Kinki, Kyushu, and Okinawa.

3 Hokkaido Picking up moderately ( ) Production sees strong and weak movements. ( ) Although production of steel for construction machinery and electronic parts for smartphones is decreasing due to a decline in overseas demand including that from China, production in automobile-related industries including transport equipment remains steady. Although production of building materials related to construction such as ceramics and stone is sluggish due to a decline in public works, demand for metal products from inside and outside of Hokkaido can also be seen, including demand from private construction. As for paper and pulp, the production of some products such as specialty papers for overseas is increasing, while domestic demand is stagnant. In the food industry, the production of some products is increasing due to brisk tourism, although soaring prices of raw materials are influencing earnings due to the yen s depreciation and other factors. Business investment is increasing. ( ) With progress in investment for production capacity enhancements in manufacturing industries, including the food, electrical machinery, and transport equipment industries, and additional aggressive investment for opening new stores and digitalization by retail stores, as well as the remodeling of accommodations to improve services for tourists in non-manufacturing industries, companies show positive attitudes toward investment as a whole. Employment is improving. ( ) The effective ratio of job offers to applicants has been on an upward trend over the long term and has reached its second highest level ever, although it is at a lower level than the national ratio. Meanwhile, misalignment continues between jobseekers and available jobs; the numbers of construction technicians, such as ironworkers and formworkers, workers in factories, fully-qualified personnel such as pharmacists, and part-time employees to sell to and serve customers are insufficient. Private consumption is moderately picking up. ( ) At department stores, sales of luxury goods including jewelry and expensive watches and of duty-free items including cosmetics are growing. At supermarkets, sales of foods and beverages including fresh foods remain steady. As for sales of home appliances, sales of seasonal products such as air conditioners are brisk, and sales of large home appliances such as refrigerators and washing machines and sales of televisions appear to be on a trend toward recovery. Sales of real estate show signs of picking up. New car sales have shown weak movements due to a delay in the recovery after the light motor vehicle tax hike. Sales in tourism are briskly increasing mainly because of tourists from overseas, and hotel-occupancy rates and consumption are also increasing. Demand for smartphones in China has decreased with the saturation of the market, and production of electronic parts has decreased. (Small- and medium-sized manufacturer) We will conduct large-scale remodeling for our accommodations to provide high-quality services for wealthy foreign tourists. (Large service business) Recently, companies from the Tokyo area have been proceeding with recruiting activities in Hokkaido, and competition to secure human resources is increasing. (Small- and medium-sized service business) Although the movements of the sales of clothing items and personal goods in the premium market segments are not good, sales of luxury brands are steady due to foreigners and wealthy people. (Large retailer)

4 Tohoku Showing some weak movements while on a moderate recovery trend ( ) Production remains flat although there are some weak movements. ( ) There are more companies which are increasing production, mainly in the transport equipment industries, due to the effects of new-model cars and in sectors related to the housing industries due to the picking up of housing starts. However, production in the information and communications equipment industry remains sluggish due to stagnation in the domestic market, and while there are some companies that continue to operate at full capacity in the core electronic parts and devices and general machinery industries, some respondents pointed out that orders have decreased due to effects from the stagnation of the Chinese economy; production remains flat as a whole. As for future prospects, although there are some companies which expect to increase production due to new orders, companies expect the current situation to continue due to stagnant domestic markets; there are concerns about economic decline in economies overseas such as the Chinese economy, and expectations of weak demand are increasing. Business investment is moderately picking up. ( ) In the manufacturing industries, there are more companies that have increased investment compared with the previous year as new orders are received, leading to subsequent investments for increased production capacity, although some companies have decreased investment as a reaction to large-scale investment in the previous fiscal year. In nonmanufacturing industries, although retailers continue to show proactive attitudes toward opening new stores, and many companies have increased investment, there are some concerns about a decrease in suitable available properties. The largest category of investment is for the maintenance and renewal of equipment, followed by responses to production increases and new orders, and streamlining and labor cost reductions. The employment situation continues to improve. ( ) The employment situation continues to improve, with the ratio of job offers to applicants remaining at a high level, partly because it is being supported by demand resulting from reconstruction and recovery. Meanwhile, a sense of a labor shortage has slightly increased from the perspective of companies, and a sense of a labor shortage has become stronger in the construction and retail industries; some respondents pointed out that it is difficult to secure human resources to deal with the increase in production in the manufacturing industries. In coastal areas in disaster-affected prefectures, a mismatch between job-seekers and available jobs is noticeable, and some respondents pointed out that the labor shortage has become serious in the marine product processing industry due to the loss and aging of human resources. As for plans for the recruitment of new graduates in FY 2016, many respondents pointed out that it is difficult to secure human resources as planned due to a rise in the ratio of job offers and a change in the schedule for recruitment, although many companies have hired more new graduates than in the previous year. Private consumption shows signs of moderate recovery. ( ) Sales at department stores and supermarkets are on a moderate recovery trend because autumn clothing is showing movements, in addition to personal goods and luxury goods including jewelry, although clearance sales have had poor performance, and food and beverage sales, which had remained steady, were negatively affected by the weather. As for future prospects, although some respondents pointed out that the current situation may continue due to consumer attitudes toward money-saving, there are some expectations that consumer confidence will rise with the opportunities provided by winter bonuses. Orders were doing well until July, but they showed little progress in August; in particular, production for China was weak. (Large manufacturer / Miyagi Prefecture) We expected good performance due to summer bonuses and premium gift certificates, but did not realize an increase in sales. (Small- and medium-sized retailer / Iwate Prefecture) A sense of a labor shortage is strong in regions, so we face a situation where we have market demand but a shortage of labor force supply. (Large retailer / Miyagi Prefecture)

5 Kanto Recovering moderately ( ) Production has been weakening. ( ) Although overseas demand including demand from North America for transport equipment remains brisk, domestic sales are in a severe situation mainly due to a decrease in demand for light motor vehicles. Electronic parts for smartphones have been improved in response to high-performance trends in products, and some companies are experiencing brisk business at present. In the general machinery industry, while domestic orders of machine tools are steady, overseas orders for smartphones from China have decreased greatly. In the steel industry, inventory remains high due to a decline in domestic demand, and the inventory is being adjusted. Business investment is moderately recovering. ( ) In the manufacturing industries, most companies indicated that they would maintain and repair aging equipment, and also many companies indicated that they would enhance their equipment as initially planned. SMEs indicated that business investment is not necessary at present because of investment conducted until the previous year. Also, in non-manufacturing industries, many companies indicated that they would conduct business investment as initially planned as in the manufacturing industries; mostly they indicated that they would conduct the remodeling of stores. Employment is improving. ( ) There is a sense of a labor shortage in the manufacturing industries, and there are movements toward aggressive recruitment of new graduates and engineers. In nonmanufacturing industries, there is a sense of insufficient numbers of engineers at construction sites and salespersons at stores in the retail industry, and there are strong concerns that the situation will continue in the future. Movements toward the use of women can also be seen due to a situation where it is difficult to secure human resources because of the improvement in the employment situation. Private consumption is recovering. ( ) Sales of luxury goods and sales to inbound tourists at department stores are steady. In automobile sales, there are expectations for sales of new-model cars. Sales of summer goods including beverages and ice cream at convenience stores and sales of large home appliances including air conditioners and refrigerators at electronics mass retail stores remain brisk due to the effects of the extreme heat. However, the budget-minded attitudes of consumers toward essential daily goods and restaurants persist, and no strength has been seen in consumer spending. Regarding travel and tourism, domestic travel continues to be brisk due to good weather, and the number of foreign visitors is on an upward trend. The effects from the slowdown in the economic situation in China are large. There are many sections that depend on consumer confidence, and we feel concerns about the future. (Small- and medium-sized manufacturer / Tokyo) There are some concerns about the future, but we plan to proceed with business investment as planned. (Small- and medium-sized manufacturer / Shizuoka Prefecture) We continue to increase the number of salespersons and enhance our bases for business. And also we hire women aggressively. (Large manufacturer / Shizuoka Prefecture) Sales of summer goods have been steady due to the concentration of high temperature periods. (Large retailer / Gunma Prefecture)

6 Chubu (Tokai) Improving moderately ( ) Production sees strong and weak periods. ( ) Automobile-related industries, which are the core businesses in the region, remain flat as a whole, as domestic demand is in a weaker state, while production for North America shows signs of picking up. Production of metal-cutting machinery is moderately picking up in terms of domestic demand partly due to the effects of efforts including subsidies, in addition to steady demand from North America. Production in the electronic parts and devices industries, mainly for smartphones, is in a weak state. Production in the steel industry, mainly for automobiles, shows weak movements. And, there are concerns about the downturn of the world economy including the Chinese economy. Business investment is increasing. ( ) As for the manufacturing industries, although domestic investments, mainly for streamlining and efficiency as well as maintenance and upgrading, can be seen, investments for production capacity enhancement can also be seen in some portions of the motor vehicle parts industry. As for overseas investment, investment activities for production capacity enhancement for North America and emerging countries are evident. As for non-manufacturing industries, in the retail industry, including department stores, supermarkets, and car dealers, there have been movements toward remodeling stores and other facilities. The employment situation is steadily improving. ( ) In the manufacturing industries, movements toward increases in the recruitment of non-regular workers to meet an increase in production for the next term can be seen. As for non-manufacturing industries, a sense of an insufficient number of non-regular employees has increased in the retail industry, including supermarkets and convenience stores, and a situation persists in which the number of applicants is insufficient to meet the number of offers. Some SMEs also pointed out that they wanted to recruit excellent human resources, but large companies are in a better position to recruit them. Private consumption is recovering moderately. ( ) At department stores, sales of seasonal goods have shown strong performance due to the effects of the temperature, and also sales of luxury goods have shown strong performance. Sales to foreign visitors to Japan have increased, although the ratio of such sales to total sales is not very high. At supermarkets, sales of foods and beverages are steady partly due to a rise in the market prices of fresh foods. In automobile sales, although sales of light motor vehicles show the effects of the reexamination of auto body taxation, sales of standard-sized cars and compact cars show the effects of new-model cars. Sales of home appliances, mainly seasonal home appliances including air conditioners, exceed those in the previous year due to a rise in temperature. Domestic sales increased more than in the previous term. Sales for North America are brisk. We deal with this through overtime work. The number of employees, mainly non-regular employees, is insufficient to deal with an increase in production for the next term. (Large automobile parts manufacturer / Aichi Prefecture) Domestic sales are steady. Although sales for America are steady, business negotiations are becoming prolonged. Sales for China show a sense of a slowdown due to a decrease in new customers. (Large metal-cutting machinery manufacturer / Aichi Prefecture) Production remains flat. It exceeds our initial plan. The polarization of small- and medium-sized automobile parts manufacturers into companies whose orders have increased greatly and companies whose orders have decreased greatly is progressing. Although we plan to increase the number of non-regular employees to deal with an increase in production in the future, we face a situation where the number of applicants is insufficient to meet the number of offers. (Small- and medium-sized automobile parts manufacturer / Aichi Prefecture) Sales of luxury goods remain brisk. Sales to foreign visitors have remained brisk. As for non-regular employees, a situation where the number of applicants is insufficient to meet the number of offers continues. (Large department store / Aichi Prefecture)

7 Chubu (Hokuriku) Improving moderately ( ) Production remains at a high level, although there are some weak movements. ( ) Production in the chemical industry, mainly of medicines, is brisk. As for production in the electronic parts and devices industry, although production for automobiles overseas continues to be brisk, production for smartphones for China shows weak movements. In the general-purpose, manufacturing, and business-oriented machinery industries, while production for machine tools for North America and Europe is steady, that for China has decreased; production of construction machinery is stagnated. In the textile industry, although production for materials for vehicles is brisk, production of clothing is sluggish except for casual sports clothing for America. As for the metal products industry, production of aluminum building materials for both buildings and homes is steady. Business investment remains at a high level. ( ) In the manufacturing industries, companies are investing domestically for upgrades for existing equipment in addition to new products and adding manufacturing lines mostly in order to improve productivity, and business investment remains at a high level. As for overseas investment, movements toward setting up and adding plants in response to increased demand in relevant countries continue to be seen. In non-manufacturing industries, although massive investment toward the opening of the Hokuriku Shinkansen has settled down, some companies are considering additional investment. The employment situation is improving. ( ) In the manufacturing industries, although many companies have finished preparing for production increases and do not feel any excess or insufficiency in the number of employees, a shortage of engineers can be seen in some companies. In non-manufacturing industries, although job offers continue to be made, the sense of a labor shortage has become even stronger partly due to the opening of a series of new stores in large commercial buildings. Some respondents pointed out that this has become a serious situation. Private consumption is picking up. ( ) At department stores, although sales of core clothing items have struggled, the number of tourists has increased partly due to the effect of the opening of the Hokuriku Shinkansen, and sales from summer gift campaigns are also steady due to an increase in the purchase of special products. At supermarkets, per-customer spending has been on an upward trend because market prices of core foods remain high and the effects of the consumption tax hike have calmed down. As for consumer attitudes, there are trends toward expecting not only low prices but also safety and peace of mind. And while sales of luxury goods show some movements partly due to the effects of premium gift certificates, a cautious attitude of buying only items that consumers really need also continues. Foreign tourists continue to increase. The number of employees is insufficient, but it is difficult to increase the number of regular employees due to the costs, so we deal with production through the recruitment of nonregular workers and partly through the three-shift system. (Large manufacturer / Toyama Prefecture) Although we have raised hourly wages slightly to increase applicants for part-time jobs, they are lower compared to wages such as those in the manufacturing industries, and the number of applicants is insufficient. We cover the shortage by managing employees according to the time and the number of visiting shoppers, adjusting in ways such as increasing the number of employees on duty at busy times when many shoppers visit. (Small- and medium-sized retailer / Toyama Prefecture) Both sales and the number of shoppers exceed their levels in the previous year due to the large reaction preceding the consumption tax hike, and per-shopper spending has also been on an upward trend partly due to an attitude of expecting expensive home appliances. (Small- and medium-sized manufacturer / Ishikawa Prefecture)

8 Kinki Showing some weak movements, while it is improving moderately ( ) Production remains flat. ( ) In the electronic parts and devices industry, demand for smartphones, mainly from China, where communication networks are expanding, remains steady. In the electrical machinery industry, production of storage batteries for automobiles shows signs of picking up. On the other hand, in the steel industry, the supply and demand balance continues to ease in the Asia market; domestic demand is also in a weaker state. In the manufacturing machinery industries, production of construction machinery declined due to a reactionary decline after the last-minute demand preceding the enhancement of domestic emissions controls. As for prospects, there are some concerns about the slowdown of the Chinese economy. Business investment is picking up. ( ) Large manufacturers are making investments for the maintenance and renewal of equipment and for production capacity enhancement according to initial plans. As for small- and medium-sized manufacturers, investments for energy-saving measures including the updating of aging equipment and for efforts for productivity improvement have been seen. In non-manufacturing industries, investments for opening new stores and remodeling stores in order to attract new customers and foreign visitors to Japan can be observed. The employment situation is improving. ( ) A labor shortage still continues. Many respondents pointed out that global human resources for overseas business, as well as the numbers of fullyqualified personnel and engineers, remain insufficient, and the securement of employees is difficult, mainly in the retail and restaurant industries. Although large companies increasing the number of newly hired employees can be seen, most companies plan to hire new employees as usual and some respondents pointed out that they emphasize stable and sustainable recruitment. Private consumption is improving moderately, although some businesses remain weak. ( ) Private consumption is picking up moderately on the whole, although whether consumption goes up or down appears to depend on factors including the type of items and purchaser segment. At department stores, the purchase of luxury goods by the wealthy is brisk. At supermarkets, sales of foods and beverages in particular increased from the level of the previous year partly due to a rise in the market price of farm products. Although sales of air conditioners in particular are recovering, in the home appliance industry, sales of light motor vehicles are sluggish due to the effects of the light motor vehicle tax hike and other factors. As for travel, domestic travel remains steady, although the number of overseas trips is decreasing due to the yen s depreciation and political uncertainty, and business at leisure facilities is also brisk. Various respondents stated that consumption by foreign tourists continues to be brisk. The smartphone market remains steady, mainly in the Greater China region, where the spread of LTE is progressing. Production for automobiles (on-board systems) is also steady. Trends will be almost the same as usual and will continue to remain at a high level moving forward. (Large electronic parts and devices manufacturer / Kyoto Prefecture) Production has decreased since August due to a reactionary decline after the last-minute demand preceding the enhancement of domestic emissions controls. We don t think prospects are good. (Small- and medium-sized transport equipment manufacturer / Osaka Prefecture) There is a tendency toward a shortage of software-related engineers. In particular, engineers in their twenties and thirties are very much in demand, and there is intense competition for them. (Large information and communications equipment manufacturer / Hyogo Prefecture) Sales are supported by the wealthy and inbound travelers. Movements in the premium market segments (middle class) are not good. (Large variety retailer / Osaka Prefecture)

9 Production is increasing slightly. Although domestic production remains flat, we expect slight production increases on the whole based on trends in overseas demand for the export of automobiles. (Large manufacturer / Okayama Prefecture) Production is increasing slightly. We expect further production increases compared with those from April to June due to the transition to recovering demand in the second half of the year and progress in inventory adjustment. (Large manufacturer / Hiroshima Prefecture) The number of welders, ironworkers, scaffolders, and painters is insufficient. (Small- and medium-sized shipbuilder / Hiroshima Prefecture) These days, the situation is said to be a workers market; we face a terrible situation, where, in particular, the rate of students at universities who have declined unofficial job offers has reached 65 percent of the total. (Large retailer / Hiroshima Prefecture) We plan to open four new stores and extend the service areas of three stores. (Large retailer / Hiroshima Prefecture) Sales, mainly of seasonal goods (including air conditioners), increased, partly due to an increase in the temperature from the end of July to the middle of August. (Large electronics retailer / Osaka Prefecture) Region Chugoku Picking up ( ) Production remains flat. ( ) Production in the steel industry increased slightly due to progress in inventory adjustment. Production in the chemical industry remains flat due to a decrease in production accompanied by a decrease in exports of related products. Production in the automobile industry increased slightly due to brisk exports. Production in the general-purpose, manufacturing, and business-oriented machinery industries increased slightly due to an increase in orders for some items. Production in the electronic parts and devices industry decreased slightly due to the timing of the releases of upgraded models of smartphones by some manufacturers. Business investment is picking up. ( ) In the manufacturing industries, there is a positive trend toward increased orders and support for new products in addition to investment for the maintenance and renewal of existing equipment to support streamlining and energy saving. In non-manufacturing industries, continuous investment in opening new stores and improving management efficiency has been seen. The employment situation is steadily improving. ( ) There is a shortage of human resources in technical fields in the manufacturing and construction industries and also an insufficient workforce in the sales field because of the opening of new stores and other activities in the retail industry. A sense of a labor shortage including a lack of necessary human resources continues in a wide range of industries. Private consumption remains flat. ( ) Sales of seasonal goods were brisk due to the effects of the extreme heat from the end of July to the beginning of August. Moreover, sales of goods such as foods and beverages, personal goods, watches, cosmetics, overseas luxury brands, and large home appliances increased. As for automobile sales, although sales of standard-sized and compact cars increased, sales of light motor vehicles are sluggish due to the reactionary decline after the last-minute increased demand preceding the light motor vehicle tax hike.

10 Shikoku Showing signs of recovery while there are some weak movements ( ) Production remains almost flat. ( ) In the general purpose and manufacturing machinery industries, for the most part, a high level of production has continued, reflecting brisk demand from domestic and overseas construction. Production in the pulp, paper, and processed paper product industries shows signs of picking up because demand including demand from foreign visitors is brisk. Production in industries including the textile, nonferrous metal, and electrical machinery industries remains almost flat. Production in the ceramic, stone, and clay industry and the steel industry shows weak movements due to a decrease in domestic and overseas demand and other factors. Also, the effects of the stagnation of the Chinese economy have been felt, and there are concerns about the further expansion of these effects in the future. Business investment shows signs of moderate recovery. ( ) Business investment has been mainly for the maintenance and renewal of equipment, and active investment in response to production increases and new orders, R&D, and new store openings continue to be seen in the electrical machinery, transport equipment (shipbuilding), nonferrous metal, pulp, paper, and processed paper product, and retail industries, although there are concerns about the effects of the stagnation of the Chinese economy in the future. And, some companies have changed the timing and details of investments in response to movements in orders. The employment situation is improving. ( ) The employment situation is improving; for example, more than half of the companies which responded to the survey believe that they have an appropriate number of employees, although a wide range of industries, including the food, textile, steel, electrical machinery, retail, housing sales, and construction industries, indicate that they have an insufficient or a slightly insufficient number of employees and continue to feel a labor shortage. As for the future outlook, although companies in many industries intend to keep a constant number of employees, accounting for half of all companies, some companies intend to increase their number of employees, which indicates a continuous increase in willingness to hire employees. Private consumption shows signs of picking up amid weak movements. ( ) Sales at department stores and supermarkets show signs of moderate recovery. Sales at convenience stores remain steady mainly due to a continuous increase in the number of stores. While home appliance sales are picking up moderately, automobile sales remain flat due to the effects of the revision of the tax system and other factors. There are slight effects from business slowdowns in China and other countries. We are concerned about the further expansion of these effects. (Large manufacturer / Kagawa Prefecture) As for diapers for babies, the number of orders remains at a high level for the time being, because business inquiries resulting from demand from foreign visitors keep coming in. (Large manufacturer / Kagawa Prefecture) New graduates go to large companies in other prefectures, and the trend where the number of applicants is insufficient to meet the number of offers persists. (Large manufacturer / Ehime Prefecture) Although sales of accessories including brand-name bags have tended to rise partly because of the effects of local premium gift certificates, young people are still cautious when buying. We are concerned about the effects of financial instability in the fall on consumer spending by the wealthy. (Other retailer / Kagawa Prefecture) We conducted investment for production equipment, which we had planned for after the next fiscal year, because orders increased rapidly and we achieved numbers three times higher than the numbers we had planned for. (Small- and medium-sized manufacturer / Kochi Prefecture)

11 Kyushu Picking up moderately ( ) Production remains flat. ( ) In the transport equipment industry, although production of some automobiles for Japan increased due to positive effects from new-model cars, production of automobiles for overseas decreased due to the end of the production of some models. In the electronic parts and devices industry, demand for smartphones for overseas and demand for automobiles for overseas and domestic markets remain steady. In the general-purpose, manufacturing, and business-oriented machinery industries, as for equipment related to air conditioning for Japan and for overseas, although production for overseas is steady, production for Japan is stagnant, and orders for maintenance of facilities related to power plants have decreased due to a reactionary decline from the previous year. In the electrical machinery industry, orders also show some weak movements, although orders received from machineryrelated companies that have a high export ratio reflecting the yen s depreciation continue to be steady. In the basic materials-related industries, production of electronic parts for smartphones shows movements due to clients inventory adjustments, and the production of power semiconductor materials, which has been brisk, decreased due to the stagnation of the Chinese economy. Business investment is picking up. ( ) In the manufacturing industries, movements can be seen toward business investment for production increases and investment for development for new products in the semiconductor, metal products, and electronic equipment industries. And, investment for the maintenance and renewal of equipment and cost reduction has also been seen. Also, in non-manufacturing industries, delays and movements toward the postponement of the opening of new stores are also seen due to the soaring prices of building materials and other factors, while there are movements toward investment for remodeling stores, opening new stores, meeting demand from foreign visitors, and introducing equipment related to information systems. The employment situation is improving. ( ) In both manufacturing and non-manufacturing industries, there are movements toward being eager to secure human resources, although some manufacturers face severe situations in which the number of applicants is insufficient to meet the number of offers, with a rising effective ratio of job offers to applicants. For this reason, some companies intend to secure and retain human resources through improvements in the workplace environment. Private consumption is moderately picking up. ( ) At large-scale retail stores, although sales of luxury goods show positive performance due to factors such as an increase in inbound travel from overseas and a rise in domestic demand, budget-minded attitudes for clothing items continue. Sales in tourism and leisure-related sectors show steady domestic demand, while demand for spending overseas is sluggish mainly due to the yen s depreciation. In sales of home appliances, sales of home appliances for daily life are brisk due to the extreme heat. Sales of automobiles continue to be stagnant due to the effects of the tax hike and other factors. In housing-related sectors, demand for condominiums in city centers remains steady. Demand for single-family houses shows signs of a slight recovery. Although production continues at the level of the same month in the previous year, the number of cars produced has decreased slightly compared with the previous period, due to the end of the production of some models. (Large manufacturer / Fukuoka Prefecture) We plan to conduct investment for enhancing equipment and lines for trial products in response to an increase in demand for electronic parts for smartphones. (Large manufacturer / Kumamoto Prefecture) Securement of human resources is becoming difficult, and we are trying to secure and retain human resources through improvements in the workplace environment such as a raise in wages and the reduction of overtime work. (Large temporary help business / Fukuoka Prefecture) Private consumption is on an upward trend, because sales of luxury goods to wealthy people in Japan are brisk, in addition to the fact that sales from duty-free items have raised total sales. (Large retailer / Fukuoka Prefecture)

12 Okinawa Improving ( ) Production shows signs of picking up. ( ) Despite seasonal demand, production of food remains flat partly because of typhoons. Production of ceramic, stone, and clay products remains steady, due to public works and other factors. On the other hand, production increased due to construction work for a second runway at the Naha Airport, the extension of the Yui Rail, and private construction works including logistics facilities and condominiums. Business investment remains flat. ( )Improvements and repair work were conducted. Some respondents also pointed out that they would expect additional business investment because business was steady and that they would plan and conduct the relocation of their headquarters and the establishment of new facilities. In the wholesale and retail industries, respondents pointed out that they planned to open new stores, and other respondents pointed out that the expansion and remodeling of facilities and stores have settled down. The employment situation shows signs of improvement. ( ) Although the employment situation remains severe compared with other regions in Japan, the effective ratio of job offers to applicants remains steady and has reached a record level. However, a sense of insufficient numbers of regular and non-regular employees persists. A shortage of regular employees in the information and communications industries and a shortage of non-regular employees in the wholesale and retail industries persist. Some respondents also pointed out that they would like to implement efforts to secure superior human resources, such as the promotion of non-regular employees to regular employees and a raise in salaries. Private consumption shows signs of improvement. ( ) The sales trends at department stores and supermarkets remain steady, exceeding the level of the same month in the previous year. Sales of freshlyprepared meals and fresh foods are good. Sales of cosmetics, medicines, home appliances, and gift items are brisk due to demand from foreign visitors. Some respondents pointed out that sales to foreign customers increased from about 1.6 percent in the same period in the previous year to over 10 percent in the current period. The number of tourists also remains steady. Although the number of domestic tourists is showing some pause, the number of tourists from overseas was 160,000 in July and exceeded 150,000 in August, reaching a record level in each month. Some respondents pointed out that a shortage of accommodations including hotels greatly influenced the decrease in the number of domestic tourists. And, also, some respondents pointed out that if tangible infrastructure such as airports, hotels, and buses were better maintained, the number of tourists would increase more than ever. Sales in both the lodging department and the food and beverage department have dramatically risen due to a drastic increase in the number of lodgers, because resort hotels are in their high season. And, also, in other departments, sales from stores and hot springs increased, and incomes and profits increased on the whole. (Small- and medium-sized manufacturer / Okinawa Prefecture) We would like to continue to promote efforts such as the promotion of non-regular employees to regular employees and a raise in the salaries of all employees. We intend to connect them to the securement of superior human resources. (Large wholesaler and retailer / Okinawa Prefecture) We grasp the movements of foreign tourists through sales of duty-free items, and they increased from about 1.6 percent in the same period in the previous year to over 10 percent in the current period. We think the factors responsible are an increase in the number of flights due to the opening of an international terminal at Naha Airport last year and the decision by some Chinese visitors to change their destination from South Korea to Okinawa due to concerns about MERS. The latest data don t show the effects of a decline in stock prices in China. (Large wholesaler and retailer / Okinawa Prefecture)