Japan Economy, Housing, Lumber Shipments
Japan Economic Update: Tourism Adding Spark to Japanese Economy
Although the Japanese economy continues along its course of tepid recovery, double digit growth in the tourism industry is providing a welcome boost. According to the Cabinet Office Japan’s GDP growth is expected to finish 2015 at 1.2% in 2015 and rise to 1.7% in 2016 with increased capital and consumer spending expected during the run up to the next consumption tax increase. Nothing to write home about but beyond these macro-economic numbers the stars have aligned to spur explosive growth in tourism. Visitors to Japan hit a record 19.73 million in 2015, eclipsing for the first time since the end of WWII the number of outbound Japanese tourists. At nearly US $30 billion international tourism in Japan now ranks equal to the auto parts export industry.
The industry’s growth rate has also been remarkable. When Japan’s tourism ministry (MLIT) began its “Visit Japan” promotions campaign in 2003, the nation recorded just over 5 million foreign visitors. Following steady recovery since the 2011 Japan earthquake and tsunami, the pace of international arrivals has picked up, registering a 29% increase in 2014 and a 47% jump in 2015. What’s causing the increase? Firstly, the Japanese yen has lost nearly 50% of its value versus the US dollar since Prime Minister Shinzo Abe took office three years ago. Secondly, the Japanese government has been running successful international tourism campaigns such as “Cool Japan” that have proven effective in drawing international interest. The government also relaxed travel visa requirements to most Asian and South East Asian economies several years ago thereby opening up the gates to the region’s emerging middle class. Enhanced direct flight access to Asian destinations from regional Japanese airports as well as increase cruise liner traffic have are also proving a boon to rural tourist destinations. Expanded duty free shopping has also stimulated overseas spending. Add to this Japan’s reputation for being clean, friendly and safe and we have the makings of a robust tourism industry.
Japan Housing Starts Summary for October & November 2015
October housing starts fell an unexpected 2.5% to finish at 77,153 units. Owner occupied single family housing increased 2.4% however rental housing fell 2.6%. The mansion condominium market dropped 17.2% extending weakness in this segment for the third consecutive month.
Total wooden housing increased 2.2% to finish at 43,954 units. Post and beam starts were up 1.3% to 32,194 units. Wooden pre-fab starts slipped 7% to 1,094 units. Platform frame starts increased 6.2% to finish at 10,666 units; with custom ordered single family homes increasing 4.7% to 2,959 units; rentals up 6.0% to 6,544 units; and built for sale 2×4 spec housing up 11.4% to 1,137 units. Two by four as a percentage of all starts increased to 13.82%
In November total housing starts edged up 1.7% to 79,697 units. Owner occupied starts advanced 3.5% compared to an increase of 2.6% for rentals. The mansion condominium market continued to lag year prior results with a decline of 4.1%
Total wooden starts posted a 5.3% increase to finish at 47,485. Post and beam increased 7.0% to 35,492. Wooden pre-fab homes bucked the trend with a 10.2% decline to 1,282 units. Platform frame starts increased 2.0% to 10,711 units. Broken down by housing type, 2×4 custom homes increased 5.2% to 2,906 units; rentals edged up 1.1% to 6,588 units; and built for sale spec homes declined 0.3% to 1,210 units.
B.C. Softwood Exports to Japan
The results for B.C. softwood lumber shipments to Japan year to date through until the end of November were as follows: total shipments were 1,955,796m3, an increase of 1.4% over year prior results; SPF shipments totaled 1,375,705m3, a 4.3% increase; Hem Fir shipments were 280,114m3 (6.0%) and Douglas Fir totaled 217,864m3, a 4.3% increase. The total value of shipments YTD through November totaled $689.5 million compared to $673.3 million in 2014.