Housing investment remained high, owing both to the increase in demand ahead of the rise in the consumption tax rate, implemented in April 1997, and to low interest rates. Industrial production remained virtually unchanged until the middle of 1996, reflecting the decrease in net exports, and adjustments in the excessive inventories of some producer goods.
Compare this with the United States where the economy is now well below its pre-crisis path and is likely to remain so even once the economy recovers its cyclical losses2 (Chart 4). Clearly, exporters need to refocus their efforts to the fast-growing economies.