(Kanagawa Shimbun: October 20, 2015 – p. 12)
In the BOJ’s October Regional Economic Report (Sakura Report), the economic assessment for all regions remained unchanged, as business fixed investment and private consumption were firm; however, the decline in the population is starting to have an impact on regional demand, the mainstay of the local economies. As the slowdown in the Chinese economy is predicted to drag on, it is uncertain whether the regions will be able to maintain their recovery.
From the Sakura Report, it is clearly evident that Japan’s regional economies are weighed down by the decrease and aging of the population as well as the decline in the birthrate. The Niigata Branch reported, “Local areas far from urban centers have seen a marked decrease in demand, and some stores cannot cover their operating costs.” The Aomori Branch added, “Sales are dwindling as regular customers age and cannot shop at the store as frequently.”
Regional areas are also suffering from a labor shortage. The Takamatsu Branch said, “Construction projects are not being completed on schedule,” while the Kanazawa Branch shared, “New store openings are postponed because labor cannot be secured.”
Regional areas are seeking to resolve this situation by developing the senior citizen and foreign tourist market; however, in some regions these efforts have been overpowered by the population decline. The Nagoya Branch said, “Companies are integrating their production sites,” and the Oita Branch reported, “Companies have started to downsize and close unprofitable stores.”
The BOJ conference of branch managers is in charge of drafting the Sakura Report. At their October meeting, many managers reported that the production of electric machines and construction machinery was declining due to the slowdown in the Chinese economy. The regional economies are not on solid ground yet, as there are also concerns that Chinese tourists may decrease in number in the middle to long term.