TDB Trends Research (Research & Summary for October 2020)

Domestic economy slowly rallies from low level～ Risk of downturn due to pandemic remains large ～e-mail：keiki@mail.tdb.co.jp（Companies researched: 23,695; Valid responses: 11,448; Response rate: 48.3%;
Survey start date: May 2002)

By industry : Business confidence was positive in nine industries, manyof which showed a continued trend toward rallying.

< Overview of October 2020: Rallied >The economic diffusion index (DI) in October 2020 was 33.8, up (2.2 points)from the previous month, in the fifth consecutive month of increase. Whileremaining at a low level, the domestic economy has been slowly rallying, withproduction, shipments, and personal consumption all trending upward.

By size : Business confidence has been positive among companies of all
sizes for five consecutive months, with upward rebound afterproduction and shipments hit bottom.
By region : Business confidence has been positive in all regions for fiveconsecutive months, with upward rebound after production andshipments hit bottom.

< Future outlook: Slowly trending upward >The economy is expected to slowly trend upward amidst careful handling ofthe balance between preventing the spread of the novel coronavirus andresumption of economic activities.

50454035302520151050

43.9 43.6 42.5

41.9

38.7
32.5
25.8 25.2 27.6

29.1 29.7

31.6

36.3 37.0
33.8 35.1 35.8 35.6 35.0 35.6

38.3 39.8 41.0

41.5

42.0

After 1 year
After 1 month

After 3 months

After 6 months（Prediction→）

Oct Nov Dec Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun July Aug Sep Oct2019
2020
2021
Projected future DI
43.9 43.6 42.5 41.9 38.7 32.5 25.8 25.2 27.6 29.1 29.7 31.6 33.8 35.1 35.8 35.6 35.0 35.6 36.3 37.0 38.3 39.8 41.0 41.5 42.0
Change from October.2020
1.3 2.0 1.8 1.2 1.8 2.5 3.2 4.5 6.0 7.2 7.7 8.2*: Economic DIs are calculated based on the structural ARIMA model, in which economic statistics are incorporated to the ARIMA model.

©TEIKOKUDATABANK,LTDTDB Trends Research October 2020

1

Economic Diffusion Index (Economic DI)1/2Ratio to theOct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20

PreviousMonthTotal

43.9 43.6 42.5 41.9 38.7 32.5 25.8 25.2 27.6 29.1 29.7 31.6 33.8

2.2

Large Firms

47.1 47.0 45.7 45.3 42.0 34.8 28.2 28.1 30.1 31.7 32.4 33.9 36.4

2.5

Small to Medium-sized Firms

43.2 42.8 41.7 41.1 38.0 32.0 25.3 24.6 27.0 28.5 29.1 31.1 33.3

2.2

Micro Firms

43.9 43.5 42.1 41.4 38.8 32.3 25.4 24.6 27.8 29.4 30.0 32.0 33.9

1.9

Ratio to theOct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20

PreviousMonth

Agriculture,Forestry,Fisheries

42.3 42.5 41.7 38.4 37.9 32.8 28.2 25.1 29.6 31.4 31.0 30.3 34.4

4.1

Finance45.4 46.8 44.5 44.8 42.2 33.3 27.3 28.7 32.4 31.5 32.6 35.3 38.3

3.0

Construction

52.1 52.2 51.6 50.0 47.8 41.5 33.9 33.5 36.3 37.5 38.4 40.4 41.1

0.7

Real Estate

45.9 46.0 44.2 45.9 42.0 31.6 21.9 23.5 29.2 32.5 33.1 35.6 36.4

0.8Food,BEWerages,Livestock Feed39.1 39.7 39.9 38.0 34.5 28.4 24.8 24.6 27.2 29.6 30.5 32.0 34.2

2.2

Textile,Textile Products,Clothing

36.1 34.6 32.6 30.5 29.3 23.2 16.7 17.7 17.9 19.8 20.3 23.5 24.7

1.2

Ceramics,Stone and Clay Products

44.8 43.8 40.2 39.9 37.2 33.4 29.2 26.5 28.1 28.3 29.8 31.3 35.1

3.8Pulp, Paper and Paper Products

40.2 41.7 40.6 37.3 32.0 29.2 24.0 21.4 19.3 21.0 22.9 24.1 26.2

2.1Publishing,Printing

33.0 32.7 32.9 30.9 29.7 23.1 16.8 14.4 16.0 15.8 18.8 20.4 21.9

1.5

Chemical41.2 40.6 40.1 39.0 35.8 32.1 27.5 25.3 25.9 27.3 27.8 31.1 34.4

3.3Steel,Nonferrous Metals,Mining

39.8 38.1 37.6 36.3 32.9 29.0 23.6 21.5 20.8 22.3 23.6 25.4 29.2

3.8

General Machinery

40.8 39.9 38.4 37.3 35.4 31.1 25.3 23.6 23.5 24.6 25.0 26.5 29.1

2.6

Electrical Machinery

42.2 40.5 40.4 41.0 38.5 32.7 27.6 26.1 27.0 27.5 27.7 28.9 33.04.1

Transportation Machinery,Equipment

43.5 41.2 40.9 39.4 36.5 34.2 22.2 18.2 18.1 21.2 24.2 27.8 34.9

7.1

Medical Instruments and Equipment

41.3 42.0 39.9 40.4 39.0 34.8 27.2 26.3 28.6 28.1 29.6 30.2 32.7

2.5

Other

37.4 38.4 38.0 36.9 36.8 31.1 20.7 19.8 23.9 25.2 22.8 26.3 29.0

2.7

40.3 39.6 38.6 37.6 34.9 30.3 24.7 23.0 23.6 24.9 25.9 27.8 31.0

3.2

Food,BEWerages

38.1 37.9 37.4 37.3 33.1 25.6 21.3 21.0 24.5 27.3 27.2 30.2 32.0

1.8

Textile,Textile Products,Clothing

28.8 28.8 26.5 26.2 22.0 16.4 10.3 11.4 15.8 18.2 18.0 19.4 22.6

3.2

45.1 43.4 43.1 42.8 38.5 34.4 27.9 27.7 29.6 30.2 30.4 31.7 33.9

2.2

Paper Products,Stationery,Books

37.7 36.3 35.0 34.9 33.5 27.5 22.0 19.1 19.0 21.9 23.2 24.0 26.9

2.9

Chemical

41.0 40.4 39.0 38.7 35.5 33.2 28.9 27.4 27.6 29.2 29.5 30.1 32.3

2.2

Recycled Resources

34.8 29.0 33.3 30.8 27.1 21.2 18.7 18.8 23.8 24.5 27.8 30.2 32.9

2.7Mining Products

38.0 37.0 34.8 33.9 31.9 27.8 23.2 22.8 24.0 24.5 25.3 26.4 30.5

4.1

Machinery,Equipment

42.7 42.3 41.7 41.2 38.2 33.0 25.9 25.1 27.4 29.0 28.6 30.6 33.1

2.5

Other

37.9 37.6 37.1 36.7 31.5 26.5 21.4 19.8 23.1 25.1 25.4 27.6 30.6

3.0

39.9 39.3 38.4 37.9 34.4 29.4 23.7 23.0 25.3 27.0 27.1 28.9 31.5

2.6

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 October 20202

Economic Diffusion Index (Economic DI)2/2
Ratio to theOct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20

PreviousMonth

RetailFood,BEWerages

40.5 40.2 38.4 39.1 36.7 25.8 26.3 27.4 30.8 30.7 29.1 34.0 38.8

4.8

Textile,Textile Products,Clothing

32.7 31.5 28.7 28.0 24.2 16.2 11.4

7.9

Drugs,Sundries

35.8 37.3 40.2 37.7 34.7 27.5 28.7 25.3 32.7 32.7 31.3 32.6 33.3

0.7

Furniture33.3 26.9 31.8 31.9 29.2 22.6 10.8 15.5 31.7 40.0 38.9 38.5 37.5

▲ 1.0

Information Machinery and Equipment

34.3 32.3 38.1 38.2 36.0 28.4 19.3 21.9 33.8 29.8 30.5 30.6 34.2

3.6

Motor Vehicles,Motor Vehicle Parts

34.5 31.4 31.9 36.7 32.9 27.9 17.0 15.8 25.4 29.3 29.3 32.4 34.6

2.2

Special Merchandise

38.2 39.1 36.0 35.2 34.7 27.4 20.2 19.9 27.7 30.2 30.0 31.6 33.9

2.3

Various Merchandise

36.5 36.5 36.2 37.4 34.4 29.3 32.3 29.9 34.5 40.9 36.9 37.0 37.6

0.6

Other

48.1 40.7 47.9 48.1 43.9 31.8 26.9 30.6 31.8 26.7 25.9 33.3 33.3

0.0

37.0 36.1 35.8 36.3 34.1 26.7 21.2 21.1 29.1 31.0 30.3 32.1 34.8

2.7

44.9 45.1 42.6 39.5 34.0 27.7 22.4 22.7 21.5 24.2 25.4 28.1 30.1

2.0Electrical Household Appliances,

TotalTransportation,Warehousing

Service8.8

23.6 24.7 24.0 19.9 27.8

Restaurants

37.3 39.4 40.7 41.0 32.3 14.2

13.8 13.7 12.7 14.5 18.23.7

Postal,Telecommunications

56.1 59.5 52.8 64.6 57.1 50.0 30.3 33.3 43.3 41.7 42.6 46.7 41.7

▲ 5.0

Electricity,Gas,Water,Heat

51.2 52.2 47.4 52.4 46.7 40.5 28.4 32.4 34.4 34.9 42.5 42.5 40.4

▲ 2.1

Leasing,Rentals

54.5 53.1 50.4 50.8 46.9 34.0 27.8 29.1 30.2 31.4 32.7 34.5 34.9

0.4

Lodging, Hotels

41.3 42.0 39.1 38.5 23.2

7.0

1.5

2.9

4.8

12.4 27.2

14.8

Recreation

38.2 40.7 37.5 39.4 35.7 17.0

5.6

9.3

11.5 17.5 22.9 22.4 23.7

1.3Broadcasting

42.9 41.7 38.2 38.1 38.9 29.8 22.9 22.5 26.7 25.6 34.5 33.3 34.4

1.1

Maintenance,Guarding,Testing

49.1 47.3 46.6 46.4 42.6 36.0 27.5 26.6 29.9 33.2 34.1 36.5 38.5

2.0

Advertising40.4 39.6 37.8 40.0 34.1 21.3 11.3 10.7 14.3 19.0 18.0 20.4 21.1

0.7

Information

57.4 57.8 56.2 56.5 54.2 43.9 33.7 34.0 35.8 37.2 37.9 38.9 40.1

1.2

Labor Dispatching

53.3 50.9 46.2 49.2 42.5 34.1 21.0 20.0 25.3 24.6 25.4 26.7 29.2

2.5Special Services

51.5 50.8 49.9 50.3 45.8 40.4 31.4 32.2 35.0 36.7 36.1 40.0 40.7

0.7

Medical,Welfare,Public Health46.5 48.5 47.7 47.8 43.2 35.9 26.4 26.1 30.5 29.9 31.0 31.4 33.6

2.2

Education

42.4 37.8 43.1 41.4 40.0 29.7 13.9 18.8 28.0 29.5 31.7 34.0 34.7

0.7

Other

47.9 47.9 45.6 46.2 39.8 29.2 21.2 21.8 26.6 28.7 28.4 31.1 31.6

0.5

Total

Other

4.3

5.5

5.1

6.0

50.6 50.4 48.8 49.5 45.1 35.3 25.8 26.1 29.4 31.2 31.8 33.9 35.1

1.2

43.1 40.4 41.7 42.7 39.2 29.8 24.4 26.2 27.1 29.3 28.8 31.5 28.2

▲ 3.3

Ratio to theOct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20

PreviousMonthHokkaido

45.7 45.0 43.8 42.4 39.0 31.0 28.4 27.5 30.6 32.3 33.4 34.4 36.0

1.6

Tohoku41.9 42.2 40.9 38.8 36.7 30.7 26.0 25.3 28.5 29.7 30.4 32.6 34.4

1.8

kitakanto

40.9 40.0 40.0 39.4 36.9 31.8 25.8 24.5 26.2 27.1 28.0 30.6 33.2

2.6

minamikanto

45.5 45.5 44.3 44.5 41.1 34.1 26.3 25.5 28.4 29.7 30.4 32.3 34.2

1.9

Hokuriku

42.1 40.4 39.5 37.6 35.6 29.7 24.9 25.1 26.5 27.5 28.5 30.0 31.8

1.8

Tokai

43.6 42.7 41.8 40.6 37.3 31.4 23.7 23.4 25.3 27.0 27.7 30.3 32.6

2.3

Kinki

42.2 41.9 40.5 39.8 36.3 30.4 23.9 23.8 25.9 27.8 28.1 29.5 32.4

2.9

Chugoku

44.0 43.6 42.6 41.2 39.0 33.8 27.0 25.7 27.2 29.4 29.7 32.0 34.32.3

Shikoku44.4 44.0 43.8 42.7 39.5 36.4 30.8 28.5 30.3 30.5 31.5 32.6 33.9

1.3

Kyushu46.5 46.8 45.1 45.2 41.5 35.3 27.5 27.4 29.7 32.5 31.8 34.2 36.9

2.7

©TEIKOKUDATABANK,LTD

TDB Trends Research October 20203

Appendix

1.Research Subjects(Companies researched: 23,695; Validresponses: 11,448; Response rate: 48.3%)
Appendix

1.Region
Hokkaido
TohokukitaKantominamikanto
Hokuriku

548
798
848
3,535
610

Kyushu

1,301
1,871
667
396
874

Total

11,448TokaiKinki
Chugoku
Shikoku2.Industry (10 Industries 51 Lines of business)
Agriculture,Forestry,Fisheries

65

Finance

125

Construction

1,861

Real Estate

381

Manufacturing（3,173）

67

Textile,Textile Products,Clothing

33

Drugs,Sundries

24

Furniture

16

Electrical Household Appliances,Information Machinery and Equipment

38

Food,Beverages,Livestock Feed

383

Textile,Textile Products,Clothing

116

Motor Vehicles,Motor Vehicle Parts

Construction Materials,Furniture,Ceramics,Stone and Clay Products

251

Special Merchandise142

Pulp, Paper and Paper Products

110

Various Merchandise

43

Publishing,Printing

181

OthersChemical439

Transportation,Warehousing

497

Steel,Nonferrous Metals,Mining

547

Restaurants

55

General Machinery

511

Telecommunications

10

Electrical Machinery

350

Electricity,Gas,Water,Heat

Transportation Machinery,Equipment

109

Leasing,Rentals

128

76

Lodging, Hotels

38

Recreation

62

Precision Machinery,Medical Instruments and Equipment

Wholesale（3,008）Retail（462）

Food,Beverages

Others100

Food,Beverages

391

Textile,Textile Products,Clothing

198

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

Service（1,827）

10

19

15

Broadcasting
Maintenance,Guarding,Testing

185

351

Advertising

109

99

Information

497

294Labor Dispatching

6938

Special Services

292
123

Steel,Nonferrous Metals,Mining Products

319

Medical,Welfare,Public Health

Machinery,Equipment965

Education

Others353

Others24
201
49

OthersTotal

3.SizeLarge Firms

2,017

17.6%

Small to Medium-sized Firms

9,431

82.4%

micro Firms

3,396

29.7%

Total

11,448100.0%

89©TEIKOKUDATABANK,LTD

11,448

TDB Trends Research October 20204

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.”

2.Research Items*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 October 19 – 31 2020

Industry
Manufacturing andOther Industries*

The explanation of the Economic Diffusion Index
Research Purpose/Researched TermsTDB Economic Trend Research (started from May 2002) is a monthly
statistical survey conducted for over 20,000 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.

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 yenor
No. 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 100Micro 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 badpoints65432

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 October 20205