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Economy in Brief

Japan Sector Index Drops In March
by Robert Brusca May 24, 2010

After an encouraging spurt in January Japan’s overall sector index has fallen back for two straight months and is back barely above its level of December 2009. Only the industry index is up this month. The industrial index is up in 12 of the last 13-months but the even the pace of its increase is tailing off. The construction index is still eroding. The tertiary index which is a measure of the performance of the services sector is on a steady slow path of recovery but it fell sharply in March and in February. The tertiary index is below its December 2009 level.

The construction index is near the bottom of its five year range of values. The services sector is in the bottom 12% of its five year range. The industrial sector is the best performing sector but stands only in the 60th percentile of its range. As a result of these standings the overall business index resides in the 28th percentile of its range.

The sector indices paint an unclear picture of the Japanese economy. While the trends for the indices are still rising, except for construction, the recent weakness for industry and services is disturbing.

Key Japanese Sector Surveys
  Raw readings of each survey Percent of 5Yr range*
Indices Mar-10 Feb-10 Jan-10 Dec-09 Mar-10 Feb-10 Jan-10
Biz Activity(METI:Indices) 93.8 94.6 96.8 93.6 28.4% 34.3% 50.7%
  Construction 75.2 78.2 75.0 74.5 2.6% 13.9% 1.9%
  Industry 94.8 93.7 94.3 90.4 60.5% 57.6% 59.2%
  Tertiary(serv) 95.5 98.5 98.8 96.0 12.1% 45.1% 48.4%
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