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Overall Condition
of the Economy and Industries |
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The waterfront in Tokyo |
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| Current State |
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| Out of the Long Tunnel of Recession |
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In 2004, Japanese industry made a comeback out of the dark tunnel of recession it found itself in after the bursting of the economic bubble. Industries are treading a full-fledged path of recovery, and extreme pessimism regarding the future has all but disappeared. Management is beginning to regain confidence.
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Skyscraper buildings newly built in Shiodome Area, Tokyo |
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With the exception of just a few industry sectors like construction, virtually all sectors saw growth, with the automotive industry as the biggest driver of growth. The three top Japanese automobile manufacturers - Toyota Motor Corporation, Nissan Motor Co., Ltd. and Honda Motor Co., Ltd. - together accounted for FY2003 current income that surpassed two trillion yen. Digital industries centering on mobile phones and electronics, also became pillars that supported economic recovery. Even major consumer electronics manufacturers, which saw sustained stagnation, achieved profitability. This wave also hit the industrial materials manufacturing industry, with specialists estimating that steel and chemical engineering is seeing the highest levels since 1990 - 1991. The growth of global demand, centering on China, is behind this.
On the other hand, the construction industry is still in the doldrums. It is being affected by lowered public works spending that has resulted from the government's fiscal crunch. Another cause of this stagnation is said to be the fall in construction tender prices resulting from the fact that it has become difficult in recent years to form Dango cartels. |
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| Dango (bid rigging), in which contractors privately form an agreement in advance on bid prices, etc. used to be a habitual practice of the Japanese construction industry. Industries that are heavily dependant on government subsidies and aid are also still seeing a downturn. The agro-industry is a prime example of this. |
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