October 2025 Regional Survey

On October 1, the Bank of Japan's Fukuoka Branch released its latest regional market survey for Kyushu, based on responses from 1,043 companies. The report provides insights into business sentiment, sales and investment expectations, supply-demand dynamics, employment conditions, and financial trends across the region.

Business Sentiment Index

The Business Sentiment Index (D.I.) for September 2025 in Kyushu stands at +19%, significantly higher than the national average of +15%. Most industries reported positive sentiment, with the exception of the wood and steel sectors.

Looking ahead, compared to the Jun, the December 2025 outlook shows a slight decline of −1%. Many industry-specific indices are expected to remain flat or weaken, particularly in the service sector.

Sales and Revenue Expectations

Compared to the previous year:

- Sales are expected to increase by +1.9%

- Revenue is projected to decline by −7.1%

Both figures are lower than the expectations recorded in the June 2025 survey, indicating a more cautious stance among businesses.

Capital Investment Plans

Capital investment in Kyushu is projected to grow by +5.0% year-on-year. However, this is below the national average, which is +8.4.

Supply-Demand Balance and Pricing Trends

In September 2025, the number of companies reporting oversupply exceeded those reporting overdemand by 9%. This gap is expected to widen to 11% by December.

Regarding pricing, many companies indicated that both cost prices and selling prices are rising, reflecting continued inflationary pressure.

Employment Conditions

Labor shortages remain a significant concern. The employment D.I. (excess – shortage) stands at −41%, highlighting widespread difficulty in securing sufficient staff across industries.

Financial Trends

According to the Diffusion Index (D.I.):

- The D.I. for cash flow conditions is +9%, meaning more companies report “easy” cash flow than “tight” conditions

- The D.I. for lending attitudes is +14%, indicating more companies perceive financial institutions’ lending stance as “lenient” rather than “strict”

These figures represent sentiment differentials, not absolute percentages of respondents.