Kyushu's Economy Shows Mixed Signals

On September 12, the Bank of Japan's Fukuoka Branch released its latest regional economic report for Kyushu. The findings indicate a slow recovery overall, with some sectors showing resilience while others remain weak.

Personal Consumption

Consumer spending remains steady despite ongoing inflation. Department store sales were relatively strong, though slightly below last year's figures. Tourism-related expenditures are on the rise, and new car registrations are showing signs of recovery.

Investment Trends

Public investment is increasing, and capital investment remains stable. However, housing investment is beginning to soften, reflecting caution in the residential sector.

Export Activity

Exports weakened in September, with year-on-year figures showing a decline. This downturn reflects global demand fluctuations and sector-specific challenges.

Industrial Production

Overall industrial output remains flat, with sector-specific variations:

- Transport Machinery: Automobile production has bottomed out; shipbuilding is on the rise

- Electrical Components & Devices: Output remains high, though some areas show signs of weakness

- Production Machinery: Recovery has plateaued

- Chemicals: Sector is gradually recovering

- Iron & Steel: Showing continued weakness

- Food Products: Production is declining, with some fluctuations

Employment and Income

Kyushu's labor market continues to recover. The job-offer-to-applicant ratio remains high, and employee compensation—based on June estimates—has increased year-on-year. This growth is driven by a rise in regular employment and higher cash wages.

Inflation and Outlook

The Consumer Price Index (CPI) for July 2025 rose by 3.5% compared to the previous year, signaling persistent inflationary pressure across the region.

Financial Conditions

Both deposits and loans increased in July. Although the number of bankruptcies rose in August year-on-year, the total debt associated with those bankruptcies declined.