Economic Reports Roundup: Economy Watchers, Index of Business Conditions, Corporate Services Price Index, and US Car Sales

August 12, 2007
By Ken Worsley

On Wednesday, the Cabinet Office announced the results of the July Economy Watcher’s Survey. The final score for the survey fell 1.3 points, to 44.7. This was the fourth consecutive month that the score was down. A figure below 50 means that pessimists outnumber the optimists in terms of economic conditions. This survey focuses on workers whose positions are highly sensitive to current economic conditions, such as taxi and truck drivers, sales staff at department stores, restaurant owners, and operators of other retail shops.

Released on Monday, the Index of Business Conditions Report for June (also from the Cabinet Office) showed increases in the Leading and Coincident Diffusion Indexes, but a sharp decrease in the Lagging Index. The Leading Index, which measures sentiment for the future, was up from 40.9 in May to 80.0 in June. The Coincident Index rose from 60 in May to 77.8 in June.

The Lagging Index, however, took a dive from 100 in May to 50.0 in June. According to the Cabinet Office, figures for industrial goods shipments were at record highs. The index for sales by small and midsize firms reached its highest figure when measuring from the beginning of the current cycle of economic expansion (February 2002).

In June, machinery orders were down 10.4% against June of last year. Machine tool orders, however, were up 18.2%, according to the Japan Machine Tool Builders Association.

On Friday, the Bank of Japan announced that wholesale prices were at their highest in nine years in July. The corporate services price index rose 2.1% in July, and showed upward movement for the 41st consecutive month. Petroleum and coal products saw price rises of 2.7% versus July of last year.

Finally, US auto sales hit their lowest total in nine years in June, which is sure to make exporters nervous. However, Japanese automakers are getting a bigger slice of the pie;the market share of Detroit’s big three automakers fell below 50% for the first time ever.

Filed Under Bank of Japan, Cabinet Office, Corporate Price Index, Economic Reports, Economy Watchers, Japan

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