Meanwhile, net exports (real exports minus real imports) are starting to decrease reflecting a slowdown in overseas economies such as the U.S. and East Asia. Housing investment is declining gradually. Reflecting such developments in final demand, industrial production remains on a rising trend, but the pace is slowing considerably.
Inventories of some materials and electronics parts, of which demand from overseas is declining significantly, become somewhat excessive, but inventories as a whole still remain at a low level. Meanwhile, corporate profits continue to improve. Income conditions of households still remain severe but are not deteriorating as employment conditions are on an improving trend and wages are slightly above the previous year’s level.