Japan consumer confidence hits another all-time low in November: Cabinet Office

December 12, 2008
By Ken Worsley

In October, Japan’s Consumer Confidence Index slipped below 30 for the first time in history, hitting 29.4 points. Today, the Cabinet Office announced November figures, and the data shows Japan’s Consumer Confidence Index falling to a fresh all-time low of 28.4.

The Consumer Confidence Index itself contains five scores, each of which is considered positive when above 50, and pessimistic when below the 50 mark. Here’s a breakdown for November figures, with the change from the previous month:

Consumer Confidence Index: 28.4 (-1.0)
Overall Livelihood: 29.4 (-0.2)
Income Growth: 33.4 (-1.1)
Employment: 21.1 (-3.7)
Willingness to buy durable goods: 29.6 (+0.8)

Whereas all five scores fell in October, we did see a rise in “Willingness to buy durable goods” in November. That willingness, however, is still very low, and won’t get much higher so long as wages continue to decline in real terms.

Another telling statistic is that the “Employment” score has fallen 7.8 points over the past two months, and a whopping 22 points over the past year. We need to bear in mind that the Cabinet Office conducted this survey before many of the headline-grabbing job cuts at exporters such as Sony were announced.

While this hardly bodes well for consumer spending figures in the October-December quarter, there is also bad news on the capital spending front, as All Nippon Airways (ANA) has announced plans to cut its capital investment plan up to March 2012 by between 100 and 200 billion yen. ANA expects to see operating profit decline 35% in fiscal 2008 and does not expect to see a recovery in FY2009.

Filed Under Cabinet Office, Consumer Confidence Index, Economic Reports