Currently, the economy is being led by domestic demand such as private consumption and public investment, and it is the nonmanufacturing sector that is at the forefront of the recovery. Since the nonmanufacturing sector is more labor-intensive than the manufacturing sector, this has resulted in a tightening of labor market conditions.
In the construction, retail, and service sectors, some firms have found it difficult to expand their business due to labor shortages. According to the Tankan survey, excess capacity has almost disappeared. With the high level of capacity utilization, there have been more frequent disruptions of the smooth operation of production.