Enquête Tankan meilleure que prévue
Business conditions improved substantially in September compared to three months earlier. In particular, exporters and construction firms reported better results. However, the loss in purchasing power is increasingly weighing on the retail sector. Wages have been more or less stagnant despite tight labour market conditions.
Business conditions improved substantially over the past three months according to the Tankan survey. The overall diffusion index (DI) rose to 2 against -2 three month earlier. Companies expect conditions to remain favourable in the fourth quarter.
■ Two interesting developments can be observed. First, the current economic situation particularly favours large manufacturing companies. Their competitiveness has considerably improved since the sharp depreciation of the yen. In large motor vehicle enterprises, the business condition index improved from 14 to 27. The second development is that the construction industry and related sectors have benefited from the increase in public works. The diffusion indices of the large, medium and small-sized construction enterprises improved by around 6 points.
■ By contrast, business conditions in the retail sector disappointed. This contradicts some anecdotal evidence that point to strong sales of luxury items and electric appliances such as refrigerators and air-conditioners ahead of the planned 3 point VAT hike in April. However, it might be that this increase has been to the detriment of spending on other items. This is certainly suggested by today’s Family Income and Expenditure Survey for August. Spending by workers’ households (of which the head is a wage earner) rebounded strongly by 1.9% in real terms, as summer bonuses were spent. Nevertheless, expenditure remained on a downward trend (-1.7% 6m/6m annualised).
■ A major problem for households is that wage increases have been lagging behind inflation. In August, consumer prices increased by 0.9%, mainly due to higher import prices. By contrast, wages including bonuses declined by 0.6% from a year earlier. (This number is likely to be revised upwards in the coming weeks).
■ This may be surprising given the tightening of labour market conditions. Unemployment is relatively low (4.1% of the working force in August) and the labour market seem to tighten. The job-to-applicant ratio – an indicator for labour market conditions – is on rising trend since August 2009. Moreover, the number of enterprises reporting excessive employment in the Tankan has declined substantially. However, many workers have rather precarious contracts.
BY Raymond VAN DER PUTTEN
To Read the Entire Report Please Click on the pdf File Below.
Business conditions improved substantially in September compared to three months earlier. In particular, exporters and construction firms reported better results. However, the loss in purchasing power is increasingly weighing on the retail sector. Wages have been more or less stagnant despite tight labour market conditions.
Business conditions improved substantially over the past three months according to the Tankan survey. The overall diffusion index (DI) rose to 2 against -2 three month earlier. Companies expect conditions to remain favourable in the fourth quarter.
■ Two interesting developments can be observed. First, the current economic situation particularly favours large manufacturing companies. Their competitiveness has considerably improved since the sharp depreciation of the yen. In large motor vehicle enterprises, the business condition index improved from 14 to 27. The second development is that the construction industry and related sectors have benefited from the increase in public works. The diffusion indices of the large, medium and small-sized construction enterprises improved by around 6 points.
■ By contrast, business conditions in the retail sector disappointed. This contradicts some anecdotal evidence that point to strong sales of luxury items and electric appliances such as refrigerators and air-conditioners ahead of the planned 3 point VAT hike in April. However, it might be that this increase has been to the detriment of spending on other items. This is certainly suggested by today’s Family Income and Expenditure Survey for August. Spending by workers’ households (of which the head is a wage earner) rebounded strongly by 1.9% in real terms, as summer bonuses were spent. Nevertheless, expenditure remained on a downward trend (-1.7% 6m/6m annualised).
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■ A major problem for households is that wage increases have been lagging behind inflation. In August, consumer prices increased by 0.9%, mainly due to higher import prices. By contrast, wages including bonuses declined by 0.6% from a year earlier. (This number is likely to be revised upwards in the coming weeks).
■ This may be surprising given the tightening of labour market conditions. Unemployment is relatively low (4.1% of the working force in August) and the labour market seem to tighten. The job-to-applicant ratio – an indicator for labour market conditions – is on rising trend since August 2009. Moreover, the number of enterprises reporting excessive employment in the Tankan has declined substantially. However, many workers have rather precarious contracts.
BY Raymond VAN DER PUTTEN
To Read the Entire Report Please Click on the pdf File Below.
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