For the first time in 20 years, more companies in the quake-hit Tohoku region reported a "strong" local economy than those that said conditions were "weak," according to the Sendai Branch of the Bank of Japan.
For the first time in 20 years, more companies in the quake-hit Tohoku region reported a "strong" local economy than those that said conditions were "weak," according to the Sendai Branch of the Bank of Japan.
The positive economic evaluation was due largely to a buoyant construction sector in the six prefectures of the region driven by rebuilding projects after the March 11 Great East Japan Earthquake, according to the branch's December Short-Term Economic Survey of Enterprises released Dec. 15.
The latest diffusion index of business confidence for all sectors and all company sizes in the Tohoku region, calculated by deducting the proportion of companies reporting a “weak” economy from the proportion that said “strong,” was plus 3, up 7 points from the previous survey in September.
The index climbed out of negative territory for the first time since February 1992, when the index was plus 4.
However, the diffusion index for the future economic outlook among all sectors and all company sizes in the Tohoku region fell 10 points to minus 7.
“Fears remain among businesses in the region that the demand for post-quake reconstruction work will soon run out of steam, while damage from the Fukushima nuclear accident continues to be reported,” said Mitsuru Nomura, head of the central bank’s Fukushima Branch.
The diffusion index for the ceramics and soil-stone sector soared 44 points from September to plus 22, while the construction sector's index was up 4 points to plus 11. These sectors are deeply involved in rebuilding the disaster areas.
Suppliers and manufacturers of wooden materials and products had a diffusion index of minus 15, up 14 points, while the paper-pulp industry surged 20 points to minus 20, as operations resumed at their tsunami-hit plants in the Sanriku coastal area of Iwate Prefecture.
The three hardest-hit prefectures of Iwate, Miyagi and Fukushima showed significant improvement. The diffusion index for Iwate Prefecture for all sectors and all company sizes rose 17 points to plus 14, while the index for Miyagi Prefecture was up 17 points to plus 20.
Fukushima Prefecture, home to the crippled Fukushima No. 1 nuclear power plant, had a diffusion index of plus 6, up 10 points from the previous survey.