Japan Retail Sales (Oct. 2021)

Retail sales kept rising in October despite another drop in motor vehicles sales. With supply disruptions now starting to ease and mobility picking up, they should continue to increase.
Marcel Thieliant Senior Japan, Australia & New Zealand Economist
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Japan Chart Book

Hit to output from staff absences could be hard

Skyrocketing infections and a 10-day isolation requirement for close contacts of positive cases have resulted in a wave of staff absences in Japan. Domestic carmakers already struggling with chip shortages appear to have been among the first victims of strict isolation rules. Both Toyota and Honda were forced to close some production lines at the end of last week due to staff absences. Based on the National Institute of Infectious Disease’s analysis suggesting that each positive case has up to five close contacts, Nikkei estimates that 1.8 million people could be self-isolating by the end of the month. Assuming those in and out of the workforce are equally affected, that would translate into 1.3% of workers in Japan self-isolating. Despite a much lower caseload, that would be similar to staff absences in other advanced economies where we estimate that between 0.5% and 2% of workers are isolating. And with timely data provided by the Cabinet Office pointing to a surge in job vacancies at the end of the year, the wave of staff absences appears to be hitting just as firms are struggling to find new staff. Temporary hits to production from staff shortages will cause GDP to only tread water this quarter.

24 January 2022

Japan Data Response

Japan Flash PMIs (Jan. 2022)

The January flash PMI suggests that the manufacturing sector continues to expand at a rapid pace, but there are mounting signs that firms are passing on higher input costs to consumers. By contrast, activity in the services sector has slumped.

24 January 2022

Japan Economics Weekly

Restrictions may not last long, key Shunto approaching

With restrictions this week expanded to cover most of Japan’s economy, and surging infections already starting to cause staff shortages in some industries, GDP is only likely to tread water this quarter. But based on experience elsewhere, the Omicron surge may only last another couple of weeks before staff shortages ease and countermeasures start to be lifted again. Meanwhile, reports suggesting that Toyota’s labour union – sometimes seen as a bellwether in wage talks – will seek a sharp rise in bonus payments at this year’s Shunto could be an early sign that wage growth will pick up this year in line with PM Kishida’s wishes.

21 January 2022

More from Marcel Thieliant

Australia & New Zealand Economics Weekly

Border reopening won’t ease labour shortages much

Australia’s government isn’t keen on opening the immigration floodgates once the border reopens to migrants next year and we still expect the unemployment rate to fall to 4% by 2023. Nor do we expect migration to ease labour shortages in New Zealand much next year. Nonetheless, New Zealand’s labour market is already very tight and with the RBNZ set to keep tightening monetary policy, we expect unemployment to creep higher over the next couple of years.

26 November 2021

Australia & New Zealand Data Response

Australia - Retail Sales (Oct. 2021)

The 4.9% m/m jump in retail sales in October brought them very close to their May peak and supports our view that consumption will reverse nearly all of the plunge during the lockdown this quarter.

26 November 2021

Australia & New Zealand Data Response

Australia Private Capex Survey (Q3 21)

Private capital expenditure dropped during the recent lockdowns but firms’ forecasts point to a strong rebound over the coming quarters.

25 November 2021
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