Japan Economic Overview

While still registering positive growth, the Japanese economy is facing headwinds of sluggish consumer demand and slowing exports. In 2018 Japan achieved record number of inbound tourists at 31.19 million; with tourism spending also reaching a new high of 4.5 trillion yen. However, December consumer confidence fell to a two year low and overall consumer spending remained weak. In 2018 convenience store sales nudged a 0.6% increase, while supermarket sales fell 0.2%. As a result the Bank of Japan has lowered its 2019 inflation forecast from 1.4% to 0.9% and is expected to keep stimulative monetary policy measures in place. Japan exports are also beginning to experience collateral damage from the U.S. – China trade disputes as December exports fell 3.8%. Global risks such as the E.U. Brexit and U.S. trade tensions are weighing on growth prospects for 2019.

Japan Housing Starts Summary for November 2018

October total housing starts declined 0.6% to 84,213 units. The recent trend of resilience in owner occupied starts and sluggishness in rentals continued. Owner occupied housing starts increased 2.5%, whereas rental housing fell 6.9%. Total wooden housing dropped 3.7% to 48,089 units. Post and beam starts declined 3.6% to 36,607 units. Wooden pre-fab fell 6.3% to 1,140 units. Platform frame starts retreated 3.7% to 10,342 units. By housing type, the breakdown in platform starts is as follows: custom ordered homes increased 1.9% to 2,955 units, rentals declined 7.5% to 6,115 units and built for sale spec homes rose 4.3% to 1,268 units.

2×4 Social Media Campaign

COFI Tokyo launched its second YouTube and Facebook advertising social media promotion campaign last month to create awareness and positively brand 2×4 to prospective home buyers in Japan. This year’s campaign runs for three months: from December 6, 2018 to March 7, 2019. It is a continuation of last year’s campaign, but this time includes three new animation video clips that were recently produced for the series. These new animations outline the environmental benefits of building and owning a 2×4 house (fifth episode), the style flexibility of 2×4 home designs (sixth episode) and ease of renovations for 2×4 homes (seventh episode), based on characters from the “Three Little Pigs” story. To date we had a half a million accumulative views of the 2×4 promotion series on our YouTube channel and are hoping to double the number of views in 2019. To view campaign and view all seven episodes for the end user’ targeted 2×4 promotion series featuring the Three Little Pigs please click on link below.

COFI Expands Market Opportunities for 2×10 and 2×12 in Japanese P&B Construction

Following an extensive testing program, in 2013 COFI obtained a voluntary evaluation certificate from the Japan Housing and Wood Technology Centre (HOWTEC) which eliminated technical barriers in using Canadian 2×4, 2×6 and 2×8 SPF, Douglas Fir and Hem-Fir dimension lumber in Japanese post and beam horizontal structural applications. Based on this third party evaluation, we developed an Excel based structural calculations tool to facilitate specification of dimension lumber in Post & Beam design. Over this 5-year period, approximately 100 structural engineers, builders and architects have downloaded this design tool from the COFI Japan site for use their projects. In 2018 COFI was required to renew this HOWTEC evaluation certificate and over the past year we’ve worked to expand the scope of this certificate to include wider width dimension as part of our ongoing market access work. We had been fielding requests by users in colder, heavier snow load regions in Japan to include 2×10 and 2×12 sizes as part of the horizontal diaphragm specifications. As the designers in these colder regions need to specify thicker thermal insulation in roof structure, the rafters with greater depths are desired than those in the previous evaluation. By the end of 2018 our HOWTEC renewal work resulted in us obtaining the new certificate and revising our structural design manual to include 2×10 and 2×12. We released the updated Excel design tool in early January and we have already received several messages from the design tool users thanking us for the expanded scope. The attached photos show an example of how the design tool is being utilized. The structural engineer who sent us these photos was successful in designing a P&B building with 2×10 SPF dimension lumber as roof rafters.

Midply Makes It’s Debut at the Green Book Seminars

As reported in this blog in August 2018, the Midply Wall System has been officially positioned in the Japanese PFC building code by means of a revision to the “Green Book” structural design manual. Local building officials refer to this structural design manual publication as a basis for approval when they issue building permits. This is the first update of the Green Book since 2007 and the manual revisions contained therein are designed to facilitate the use of PFC in large scale and midrise construction. On November 8th, the first seminar took place in Tokyo to explain the overview of the Green Book revisions. The turnout was approximately 400. This was one of the 11 seminars that are scheduled to take place in major cities across the country. The seminar consisted of 4 sections; 2×4 building code revisions, structure, fire and building materials. In the structural section, Dr. Naoto Kawai, a noted wooden structural expert, served as a lecturer. He made a presentation using PowerPoint slides. Out of 108 slides in the PowerPoint presentation he showed, 11 slides were used to explain the newly introduced Midply Wall System. These seminars are being conducted by the Japan 2×4 Home Builders Association. They are expected to raise industry awareness about this next generation Canadian shear wall building solution.