Americanmachinist 1834 Japan0100png00000001015
Americanmachinist 1834 Japan0100png00000001015
Americanmachinist 1834 Japan0100png00000001015
Americanmachinist 1834 Japan0100png00000001015
Americanmachinist 1834 Japan0100png00000001015

Maintaining prosperity in Japan

March 1, 2001
The Japanese economy is heading for a slight downturn, and machine tool manufacturers are wary.

The Japanese economy is heading for a slight downturn, and machine tool manufacturers are wary.

The Japanese Center for Economic Research has good news and bad news regarding the future Japanese economy. The bad news, for the short term, is that the Japanese economy is in for a bumpy ride in the next fiscal year. The good news, however, reports the JCER, is that the GDP gap should be eliminated by 2002, and a mini-correction phase in fiscal 2003 will get growth back on track in 2004 and 2005 at about 1.5% per year.

According to the JCER, the slowing of U.S. and Asian economies is ominous because exports served as "the engine of recovery" for previous downturns in the Japanese economy. It is also expected that GDP growth, which is estimated at 2.1% for the fiscal year 2000, should decline to 1.9% in fiscal 2001, with the slowdown hitting hardest in the second half of this year.

The most recent quarterly survey of the Japan Machine Tool Builders' Association (JMTBA) found member companies were aware of Japan's delicate economic condition. The survey indicated a "sensitivity and wariness of machine tool builders toward the out-look of the economy." Respondents expecting increasing orders for the January through March 2001 quarter totaled 25.4%. This was a 23.1-point drop compared to the last quarter's survey, when 48.5% felt orders would increase. Many of those previous optimists now anticipate sustained order levels, making the percentage of member companies predicting a plateau 61.2%. Those foreseeing decreased orders also increased by 6 points from 7.4 to 13.4%.

Japanese manufacturers are now seeing the effects of a recent slowing in monthly order rates. Things started out well in September 2000 with orders topping ¥90 billion for the first time in 27 months. This was an 11% increase from August's figures and good news for Japanese manufacturers. But the orders slowed, slipping 3.7% in October and then another 0.2% in November.

But year-to-year growth has remained solid throughout 2000. Total orders in the first 11 months of 2000 amounted to ¥887,786 million, up 28.6% from a year earlier with the rate of increase advancing 0.6 points over the year-on-year gain made in the first 10 months. By source, domestic orders accounted for ¥471,400 million, up 43.1%, and foreign orders for ¥416,386 million, up 15.4%, indicating robust trends.

During the 11-month period, domestic orders accounted for 56.4% of total orders as compared with 52.3% in the first 10 months. JMTBA believes this increase demonstrates the positive effect of the 20th JIMTOF exhibition, which took place from late October through early November.

According to the Japanese Ministry of Finance, total exports are up for the year 2000, with ¥529,222 in 1999 compared to a ¥560,658 total, from November 2000. Most of the exports, ¥198,159, are shipping to the U.S., followed by ¥71,130 worth of equipment to Taiwan and ¥32,486 to Germany. Imports are also on the rise, from ¥63,711 in 1999 to ¥72,264 as of November 2000. The U.S. is the major importer to Japan with ¥45,584, and Germany is next with ¥5,379, followed by Switzerland with ¥4,390.

Value in million of Yen

Exports by destination

Jan.-Dec. 1999
Jan.-Nov. 2000
*Country/Region
Units
Total Value
99/98%
Units
Total Value
00/99%
U.S.
14,719
201,045
69.7
17,506
198,159
108.5
Taiwan
10,094
51,962
113.8
7,208
71,130
159.1
Germany
4,978
37,056
74.3
3,789
32,486
94.8
China
2,952
27,522
77.7
4,104
30,324
117.6
Korea
2,750
26,947
185.1
5,298
50,195
200.3
Belgium
1,900
22,767
78.7
1,578
18,726
87.8
Italy
1,632
15,583
80.9
1,491
12,867
86.1
U.K.
8,504
14,579
68.6
5,772
12,903
93.3
Singapore
6,592
13,788
118.4
6,806
18,667
162.6
Thailand
4,398
12,547
114.4
6,189
17,954
167.4
Others
57,341
105,425
48,010
97,248
(EU)
24,037
121,065
76.2
18,913
104,999
92.7
Total
115,860
529,222
80.5
107,751
560,658
###
Source: Ministry of Finance *Order of top 10 destinations in 1999

Value in million of Yen

Imports by sources

Jan.-Dec. 1999
Jan.-Nov. 2000
*Country/Region
Units
Total Value
99/98%
Units
Total Value
00/99%
U.S.
5,371
38,241
113.7
3,446
45,584
130.2
Germany
1,079
4,940
66.6
811
5,379
117.2
Switzerland
830
4,236
68.7
934
4,390
107.2
Thailand
837
3,458
140.6
616
2,442
74.5
China
121,029
2,887
98.8
144,979
3,299
125.6
Singapore
746
2,278
66.0
777
2,438
117.3
Taiwan
87,657
1,827
68.5
56,032
1,622
95.3
U.K.
175
1,786
215.2
87
2,296
132.6
Sweden
91
1,359
40.1
72
1,948
143.8
Korea
6,377
667
61.7
8,041
1,255
206.9
Others
4,868
2,033
7,617
1,612
(EU)
3,495
9,528
74.2
6,918
10,751
119.1
Total
229,060
63,711
96.8
223,412
72,264
###
Source: Ministry of Finance *Order of top 10 sources in 1999

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