In addition, the terrorist attacks in the U.S. have further heightened uncertainty in Japan’s economy. With regard to final demand, net exports (real exports minus real imports) continue to decline, reflecting not only a slowdown in overseas economies but also sluggish demand for IT-related goods. Business fixed investment is also decreasing noticeably while exporting conditions continue to deteriorate.
Housing investment remains sluggish and public investment is declining. Meanwhile, private consumption remains almost flat on the whole, although somewhat weak indicators are increasing recently. Industrial production continues to decline considerably, reflecting these developments in final demand and also strong excessiveness in inventories of electronic parts and materials. The decrease in corporate profits, particularly in manufacturing, has become evident and household income weakens gradually.