TDB Trends Research (Nationwide, Research & Summary for May 2023)

Economy improves for third straight month,
supported by strong tourism～ The consecutive national holidays without pandemic restrictions
and inbound consumption were positive factors ～e-mail：keiki@mail.tdb.co.jp(Companies researched: 27,930; Valid responses: 11,420; Response rate: 40.9%; Surveystart date: May 2002)

By industry: Improved in 9 out of 10 industries, with continued strong
demand mainly related to tourism and food and beverage.

< Trend in May 2023: Continued improvement >The economic diffusion index (DI) in May 2023 was 45.4, up 0.8 point fromthe previous month, for a third straight month of improvement. The domestic
economy showed a strong pick-up movement broadly amid further accelerationof a move toward normalization of economic activities and social life.

By scale: Companies of all sizes showed an improvement for the thirdstraight month as the movement toward leaving COVID behind gainedmomentum.
By region: All 10 regions reported a third straight month of improvement,driven by travel and tourism in each region.

< Future outlook: Continued trend toward gradual recovery >Although there are concerns about downside factors including risingcosts, Japan’s economy is expected to show a trend toward a gradualrecovery.

55504541.2 41.4 41.3 41.4 41.9

4042.6 43.1 43.0 42.1 42.1

45.4 46.0 46.4
43.9 44.6

46.9 46.5 46.8

After 3 months
After 1 month47.2 46.9 47.4 47.8 48.1 48.2

After 6 months

48.1

After 1 year

35300

（Prediction→）

Jun July Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Jan Feb Mar Apr May
202220232024
Projected future DI 41.2 41.4 41.3 41.4 41.9 42.6 43.1 43.0 42.1 42.1 43.9 44.6 45.4 46.0 46.4 46.9 46.5 46.8 47.2 46.9 47.4 47.8 48.1 48.2 48.1
Change from May.2023
0.6 1.0 1.5 1.1 1.4 1.8 1.5 2.0 2.4 2.7 2.8 2.7
Upper
48.1 48.9 49.6 49.4 49.9 50.4 50.3 50.9 51.3 51.7 51.9 51.8*: The economic forecast DI is calculated using the Forecast Combination method of the results of the ARIMA model and the structural equation model.
Lower
43.9 44.0 44.1 43.6 43.7 44.0 43.6 44.0 44.3 44.6 44.6 44.4

©TEIKOKUDATABANK,LTDMay

TDB Trends Research May 2023

1

Economic Diffusion Index (Economic DI)1/2
Ratio to theMay-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23

PreviousMonthTotal

41.2 41.4 41.3 41.4 41.9 42.6 43.1 43.0 42.1 42.1 43.9 44.6 45.4

0.8

Large Firms

43.5 43.5 43.4 43.8 43.6 44.2 45.0 44.8 44.8 44.2 46.1 47.3 48.1

0.8

Small to Medium-sized Firms

40.7 41.0 40.8 41.0 41.6 42.3 42.7 42.6 41.6 41.7 43.5 44.2 44.9

0.7

Micro Firms

39.5 40.0 39.7 39.8 40.7 41.1 41.4 41.3 40.4 40.9 42.4 42.9 43.9

1.0

Ratio to theMay-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23

Previous
Month

Agriculture,Forestry,Fisheries

37.6 34.7 36.3 35.9 35.8 36.4 37.7 37.9 37.4 38.9 41.6 42.2 44.8

2.6

Finance42.7 42.3 41.9 41.7 43.6 43.2 44.5 44.3 44.8 43.3 44.0 45.0 47.8

2.8

Construction42.2 42.5 43.1 43.3 44.0 44.2 44.9 44.6 44.1 43.7 45.5 45.6 46.9

1.3

Real Estate

44.7 45.9 44.7 44.8 45.3 44.0 45.6 44.8 46.1 46.3 47.5 49.6 50.7

1.1

Food,BEWerages,Livestock Feed37.6 37.8 36.7 36.1 35.5 38.2 38.8 38.3 38.1 37.0 41.1 42.0 43.7

1.7

Textile,Textile Products,Clothing

33.8 34.4 36.1 32.6 36.2 35.7 36.5 37.9 37.7 39.0 38.6 41.0 42.1

1.1

Ceramics,Stone and Clay Products

41.1 40.4 40.8 39.8 40.2 40.9 41.9 41.0 38.0 37.6 37.0 39.7 39.0

▲ 0.7

Pulp, Paper and Paper Products

38.3 37.4 37.5 36.6 38.0 40.4 40.2 39.2 39.8 36.6 38.6 37.6 38.6

1.0

Publishing,Printing

30.3 29.7 29.1 29.6 30.0 31.8 32.9 32.4 31.7 31.6 34.3 33.9 35.4

1.5

Chemical41.7 41.1 41.8 42.6 42.3 40.8 40.8 41.5 40.3 39.2 40.1 41.0 40.6

▲ 0.4

Steel,Nonferrous Metals,Mining

40.9 41.2 42.9 42.7 43.0 43.9 43.6 43.1 41.7 41.0 41.9 41.1 40.9

▲ 0.2

General Machinery

46.9 46.3 46.3 46.2 45.4 45.8 45.9 44.9 43.3 43.7 43.4 43.8 42.9

▲ 0.9

Electrical Machinery

44.3 44.8 44.7 44.2 45.2 44.8 45.4 44.5 43.3 43.2 42.8 43.2 43.1

▲ 0.1

Transportation Machinery,Equipment

37.6 36.8 40.3 41.2 40.2 42.2 42.1 41.0 38.7 39.6 41.2 41.5 43.0

1.5

Medical Instruments and Equipment

48.2 48.8 48.5 46.5 46.2 46.1 46.1 46.3 46.5 49.0 46.8 45.6 46.2

0.6

Other

39.2 38.1 37.8 38.2 37.5 35.4 35.9 37.0 39.1 36.1 40.8 41.9 42.70.8

41.0 40.8 41.3 41.0 41.1 41.6 41.9 41.5 40.4 40.0 41.0 41.4 41.5

0.1

Food,BEWerages

37.3 37.1 37.0 35.6 35.8 37.4 38.8 38.2 37.5 38.3 42.1 44.3 45.2

0.9

Textile,Textile Products,Clothing

31.4 31.3 29.9 29.9 29.9 32.4 33.1 34.0 34.7 35.9 38.0 41.9 43.1

1.2

38.1 38.3 38.6 38.5 37.5 39.8 39.5 40.2 38.3 37.2 38.0 39.1 38.4

▲ 0.7

Paper Products,Stationery,Books

34.2 32.8 33.0 33.5 34.5 37.1 37.0 33.8 34.8 35.6 37.3 37.9 40.3

2.4

Chemical

42.3 41.6 43.5 43.0 43.4 42.6 43.8 43.5 42.8 41.7 43.5 44.9 46.8

1.9

Recycled Resources

47.5 41.4 40.9 39.6 47.0 46.3 43.5 46.2 43.3 43.2 41.7 43.5 40.4

▲ 3.1

Mining Products

40.0 39.7 39.3 39.3 39.8 39.7 40.2 39.9 38.5 37.1 37.8 37.9 38.1

0.2

Machinery,Equipment

42.0 42.9 43.1 42.6 43.3 44.1 44.1 43.8 43.0 43.3 45.2 45.2 46.0

0.8

Other

37.8 38.1 37.7 37.7 38.2 39.0 39.6 40.9 40.0 40.9 42.3 43.9 44.9

1.039.4 39.4 39.5 39.2 39.6 40.6 41.0 41.0 40.1 40.1 41.9 42.9 43.7

0.8

Construction Materials,Furniture,

Manufacturing

Precision Machinery,

Total

Construction Materials,
Furniture,Ceramics,
Stone and Clay Products

Wholesale.

Steel,Nonferrous Metals,

Total©TEIKOKUDATABANK,LTD

TDB Trends Research May 2023

2

Economic Diffusion Index (Economic DI)2/2
Ratio to theMay-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23

PreviousMonth

RetailFood,BEWerages

41.8 42.7 40.3 39.9 40.2 39.6 43.2 42.2 42.3 40.6 42.7 49.1 49.7

Textile,Textile Products,Clothing

33.9 33.6 37.7 33.6 34.9 38.7 38.1 35.4 34.2 35.7 39.7 36.6 38.3

1.7

Drugs,Sundries

38.9 40.1 37.1 41.9 39.5 38.9 40.6 39.0 37.2 38.5 42.9 47.8 47.4

▲ 0.4

Furniture

34.3 39.8 35.2 36.1 40.0 37.8 36.2 31.0 34.2 33.3 39.5 38.1 34.7

▲ 3.4

Information Machinery and Equipment

34.7 34.0 36.7 32.7 37.1 35.1 35.3 37.2 36.3 37.5 40.2 37.8 40.5

2.7

Motor Vehicles,Motor Vehicle Parts

37.1 36.4 32.4 35.9 38.8 37.6 37.2 35.3 38.2 38.7 40.8 44.0 41.5

▲ 2.5

Special Merchandise

33.1 34.3 33.2 34.7 34.0 33.5 35.4 34.8 34.4 35.3 38.6 39.0 39.4

0.4

Various Merchandise

39.9 37.8 40.2 38.0 36.1 41.3 41.4 42.6 42.5 41.0 43.6 47.8 45.8

▲ 2.0

Other

41.0 39.7 36.9 42.3 32.1 36.5 44.9 41.1 42.3 44.8 41.1 41.7 41.1

▲ 0.6

36.4 36.7 35.7 36.3 36.7 36.8 38.2 37.4 37.5 37.7 40.6 42.5 42.4

▲ 0.1

37.2 37.1 37.8 37.3 38.2 40.7 41.6 41.6 38.9 38.0 41.2 42.1 43.4

1.3

Restaurants

34.3 38.0 34.0 28.1 31.8 39.0 39.1 41.5 38.5 42.4 49.8 50.8 56.7

5.9

Postal,Telecommunications

53.0 56.0 47.0 47.9 51.9 52.4 50.0 48.3 47.6 44.4 52.8 52.8 58.3

5.5

Electricity,Gas,Water,Heat

40.6 34.3 37.7 35.9 36.1 31.1 32.3 36.7 32.4 32.1 39.7 38.9 44.0

5.1

Leasing,Rentals

43.3 44.9 40.8 44.7 45.6 47.5 48.4 47.4 46.8 47.4 48.1 50.5 49.7

▲ 0.8

Lodging, Hotels

33.0 33.3 30.3 38.0 37.4 53.3 54.8 52.2 48.3 48.0 59.5 62.1 59.8

▲ 2.3

Recreation

38.9 41.6 40.7 40.1 42.2 45.0 43.8 43.2 42.1 44.1 50.9 48.9 50.4

1.5

Broadcasting

43.3 41.7 43.0 38.3 46.1 43.1 41.7 39.5 40.7 41.1 42.6 44.7 47.4

2.7

Maintenance,Guarding,Testing

42.5 44.2 42.2 43.4 42.8 42.8 43.6 45.6 42.9 42.6 45.3 45.8 47.3

1.5

Advertising

34.8 37.3 34.3 36.7 39.3 40.9 40.3 39.7 40.2 41.4 43.7 46.6 45.0

▲ 1.6

Information

50.8 52.0 51.5 52.7 53.0 52.3 53.0 53.6 53.2 53.8 55.5 55.8 56.2

0.4

Labor Dispatching

47.6 45.7 46.5 49.8 47.4 48.8 46.5 50.0 48.5 47.9 47.3 49.6 50.7

1.1Special Services

48.1 49.6 48.7 48.3 49.4 49.0 48.8 48.7 48.5 49.2 50.1 50.9 52.3

1.4

Medical,Welfare,Public Health44.4 43.5 42.5 41.2 41.7 43.2 43.6 42.8 42.9 41.5 42.2 41.8 44.6

2.8

Education

35.6 40.1 38.8 39.7 43.7 42.1 42.8 41.2 38.4 41.9 44.4 38.4 42.2

3.8

Other

42.7 42.8 42.4 41.2 42.8 43.3 43.5 44.0 42.2 44.3 46.5 48.6 47.5

▲ 1.1

44.8 45.9 44.4 45.4 46.3 47.1 47.3 47.7 46.6 47.4 50.0 50.8 51.6

0.8

38.1 35.6 36.6 38.3 37.2 37.9 38.2 36.7 36.5 37.0 38.2 39.2 41.2

2.0Electrical Household Appliances,

Total

Transportation,Warehousing

Service

Total

Other

0.6

Ratio to theMay-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23

PreviousMonthHokkaido

38.9 40.1 41.0 40.2 40.7 41.2 40.9 40.8 40.1 40.6 41.2 42.2 43.00.8Tohoku

39.1 39.0 38.8 38.1 39.3 39.9 40.3 39.4 38.0 37.2 41.1 41.2 41.6

0.4

kitakanto

42.1 42.6 42.9 43.8 42.5 43.7 43.7 43.1 40.9 41.4 42.6 43.3 43.4

0.1

minamikanto

42.7 43.2 42.6 43.3 43.6 43.8 44.4 44.7 44.1 43.9 45.7 46.7 47.2

0.5

Hokuriku

40.6 40.5 41.5 40.8 41.7 42.3 42.2 42.2 40.9 41.2 42.1 42.5 44.0

1.5

Tokai

40.1 39.5 39.5 39.7 40.4 41.1 41.4 41.7 41.0 41.1 42.8 43.3 44.6

1.3

Kinki

40.9 40.9 40.9 41.1 41.5 42.3 43.0 42.7 42.0 41.8 43.6 44.3 45.4

1.1

Chugoku40.6 41.1 41.3 40.9 41.8 42.8 43.8 43.4 41.9 41.8 44.1 44.8 44.9

0.1

Shikoku38.7 38.4 38.3 37.7 38.7 40.3 40.0 39.3 39.0 38.6 40.0 40.7 43.0

2.3

Kyushu41.6 42.2 41.5 41.3 43.0 44.0 45.1 44.8 44.0 44.8 46.4 48.1 48.5

0.4

©TEIKOKUDATABANK,LTD

TDB Trends Research May 2023

3

Appendix

1.Research Subjects(Companies researched: 27,930; Validresponses: 11,420; Response rate: 40.9%)
1.Region

Hokkaido
TohokukitaKantominamikanto
Hokuriku

536
745
934
3,343
577

Kyushu

1,216
1,946
756
382
985

Total

11,420

Tokai

Kinki
Chugoku
Shikoku

2.Industry (10 Industries 51 Lines of business)
Agriculture,Forestry,Fisheries

108

Food,Beverages

Finance

162

Textile,Textile Products,Clothing

61

Drugs,Sundries

57

Furniture

24

Electrical Household Appliances,Information Machinery and Equipment

42

Construction

1,797

Real Estate

473
Food,Beverages,Livestock Feed

341

Textile,Textile Products,Clothing

106

Motor Vehicles,Motor Vehicle Parts

Construction Materials,Furniture,Ceramics,Stone and Clay Products

216

Special Merchandise

222

95

Various Merchandise

55

Pulp, Paper and Paper Products

Manufacturing（2,838）Wholesale（2,665）

Retail（681）

111

Publishing,Printing

167

Chemical374

Transportation,Warehousing

503

Steel,Nonferrous Metals,Mining

512

Restaurants

92

General Machinery472

Telecommunications

Electrical Machinery

305

Electricity,Gas,Water,Heat

Transportation Machinery,Equipment

15

Others8
14100

Leasing,Rentals

117

Precision Machinery,Medical Instruments and Equipment

75

Lodging, Hotels

99

Others75

Recreation

91

Food,Beverages

346

Textile,Textile Products,Clothing

162

Construction Materials,Furniture,Ceramics,Stone and Clay Products
Paper Products,Stationery,Books
ChemicalRecycled Resources

Service（2,157）

13

Broadcasting
Maintenance,Guarding,Testing

196

309

Advertising

110

96

Information

602

258

Labor Dispatching

92

33

Special Services

313
136

Steel,Nonferrous Metals,Mining Products

285

Medical,Welfare,Public Health

Machinery,Equipment847

Education

Others329

Others34240
36

OthersTotal

3.Size94

Large Firms

1,765

15.5%

Small to Medium-sized Firms

9,655

84.5%

micro Firms

3,700

32.4%

Total

11,420100.0%©TEIKOKUDATABANK,LTD

11,420

TDB Trends Research May 2023

42.Research Items

An economic DI of 50 is the point separating good and bad, so a DI over
50 means “good,” and below 50 means “bad.” (The numbers are rounded
off to one decimal place.) No weight is given according to a company's size,and calculations are made on the basis of “one company, one vote.”*Business Confidence (current, in 3 months, in 6 months, in 1 year)*Business Conditions (sales, purchasing and selling unit price, inventory, capacity
utilization ratio, number of employees, overtime work hours).Size Classification

3.Research Period and Methodology

Internet-based survey conducted May 18– 31 2023

Industry

The explanation of the Economic Diffusion Index
Research Purpose/Researched Terms
TDB Economic Trend Research (started from May 2002) is a monthly
statistical survey conducted for over 27,000 nationwide corporations on theirgeneral business activities including the current condition and future outlookof the industry business performance and operating climate. The primary
purpose of such a survey is to assess the current state of Japan’s economy.
Selection of the Subject Corporations
Companies of all sizes in all domestic industries are eligible to participate inthe survey.

Manufacturing andOther Industries*
W holesale Trade
Retail Trade
Service**

Large Firm s

Sm all to Medium -Sized Firm s(Micro Firm s included)

Capital: More than 300 m illion yen
andNo. of Em ployee: Over 300
Capital: More than 100 m illion yen
andNo. of Em ployee: Over 100
Capital: More than 50 m illion yen
andNo. of Em ployee: Over 50
Capital: More than 50 m illion yen
andNo. of Em ployee: Over 100

Capital: Below 300 m illion yenor
No. of Em ployee: Below 300
Capital: Below 100 m illion yenorNo. of Em ployee: Below 100
Capital: Below 50 m illion yenor
No. of Em ployee: Below 50
Capital: Below 50 m illion yenor
No. of Em ployee: Below 100

Micro Firm s

No. of Em ployee: Below 20
No. of Em ployee: Below 5
No. of Em ployee: Below 5
No. of Em ployee: Below 5

Note1: Large Firm s refer to com panies that rank in the top 3% in term s of sales volum e according to the type of business, am ong sm all to m idium -sizedcorporations excluding m icro firm s, which are defined in Sm all and Medium Enterprises Basic Act.
Note2: Sm all to Medium -Sized Firm s refer to com panies that rank in the bottom 50% in term s of sales volum e according to the type of business, am ong
those not categorized as sm all to m idium -sized corporations in Sm all to Medium -Sized Enterprises Basic Act.

DI Calculation
The DI（Diffusion Index）is calculated by multiplying the number of responses
for each assessment category by the number given in parentheses in thetable below, to a seven-level assessment rated by companies.
Selection category Extremely good

good

fairly goodneither good nor bad

fairly badbadvery bad

points65432

10number of responses
for each category

N6N5N4N3N2N1N0

Economic DI＝Total of (Points for each category × Number of responses for each category)∑≡

Number of valid responses N
6i≡0i × Ni

N×16×

16× 100× 100©TEIKOKUDATABANK,LTD

TDB Trends Research May 20235