Japan Economy, Housing Starts & Lumber Shipments
Japan Economic Update
On the surface, with 1.37 jobs available for every worker and an unemployment rate of 3.1%, Japan’s labour market is in a relatively sweet spot globally. But the growth of temporary non-regular employment since the end of the “salaryman” lifetime employment model in the early 1990s is one of the key factors in explaining chronic sluggishness in Japanese consumption. Despite government efforts to spur growth, household consumption fell 4.6% in August – for the sixth consecutive month.
Today part-timers and non-regular contract workers represent 40% of Japan’s workforce. While average wages for private sector regular workers average 4.8 million yen annually, part-time and contract non-regular annual wages average 1.7 million. Remediating the gap in regular versus non-regular employment is key to rebuilding Japanese consumer confidence. A government panel of labour reforms is now looking at drafting recommendations for labour market reform to address this gap in benefits as well as measures to increase workforce participation of women, the elderly as well as skilled foreign labourers such as nurses and construction workers. The panel tabled its recommendations to the end of the fiscal year.
Japan Housing Starts Summary
Total wood housing increased by 11% to 48,693 units. Post and beam starts improved 10.9% to 36,206 units. Wood pre-fab starts were up 11.4% to 1,383 units. Thanks to particular strength in multi-family, platform frame starts posted an 11.3% gain to 11,104 units. By housing type 2×4 custom ordered single family homes edged up 2.2% to 2,945 units; rentals surged 18.3% to 6,956 units and built for sale 2×4 spec housing declined 0.3% to 1,192 units.
BC Wood Exports Summary
As of the end of August, British Columbia year to date softwood lumber exports to Japan totalled 1,389,931m3: an increase of just under 1%. By value, year to date exports totalled $465.1 million – a decrease of 2.14% compared to year prior results. By species groups, SPF fared comparatively well. Between January and August, SPF shipments increased 6.2% to 1,088,275m3; Hemlock decreased 4.1% to 174,098m3, Douglas Fir fell 15.6% to 138,184m3 and Yellow Cedar fell 22.1% to 41,474m3.