TDB Trends Research (Research & Summary for February 2020)

COVID-19 significantly holding down thedomestic economy～ Nationwide worsening with the movementof people and goods stagnating ～e-mail：keiki@mail.tdb.co.jp（Companies researched: 23,668; Valid responses: 10,704; Response rate: 45.2%;
Survey start date: May 2002)< Overview of February 2020: Recession phase >The economic diffusion index (DI) in February 2020 was 38.7, down 3.2 points
from the previous month, worsening for the fifth consecutive month, and below
40 for the first time in seven years. Amid a continuing recession phase, thedomestic economic situation deteriorated markedly, with the additional impactof COVID-19.

By industry : All ten industries deteriorated. The impact of COVID-19
rippled through various industries.
By size : All sizes deteriorated for the fifth month in a row, with a drop ofover 2 points across the board due to COVID-19.
By region : Nationwide worsening with the movement of people and goods
stagnating in 45 prefectures in all ten regions.

< Future outlook: Moderate recession continues >Due to a number of risk factors, including COVID-19, a moderate recession
is expected to continue in the domestic economy.

5048464442403836343230

47.2 46.9 46.8

45.4 45.1 44.6 44.7 45.0

43.9 43.6

42.5 41.9
38.7

37.3 36.9

After 1 month36.5 36.2 36.4 36.5 36.1 35.7

After 3 months

35.5 35.234.6

After 6 months

34.3

After 1 year
（Prediction→）
Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Jan Feb
20192020
2021
Projected future DI
47.2 46.9 46.8 45.4 45.1 44.6 44.7 45.0 43.9 43.6 42.5 41.9 38.7 37.3 36.9 36.5 36.2 36.4 36.5 36.1 35.7 35.5 35.2 34.6 34.3
Change from February.2020-1.4 -1.8 -2.2 -2.5 -2.3 -2.2 -2.6 -3.0 -3.2 -3.5 -4.1 -4.4*: Economic DIs are calculated based on the structural ARIMA model, in which economic statistics are incorporated to the ARIMA model.

©TEIKOKUDATABANK,LTDTDB Trends Research February 2020

1

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

PrFDiousMonthTotal

47.2 46.9 46.8 45.4 45.1 44.6 44.7 45.0 43.9 43.6 42.5 41.9 38.7

▲ 3.2

Large Firms

49.8 49.8 49.7 48.8 48.7 47.7 47.9 48.0 47.1 47.0 45.7 45.3 42.0

▲ 3.3

Small to Medium-sized Firms

46.5 46.2 46.1 44.6 44.2 43.9 43.9 44.2 43.2 42.8 41.7 41.1 38.0

▲ 3.1

Micro Firms

46.5 46.3 46.2 44.5 44.1 43.8 44.2 45.1 43.9 43.5 42.1 41.4 38.8

▲ 2.6Ratio to tHJFeb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20

PrFDious
Month

Agriculture,Forestry,Fisheries

41.7 42.3 41.3 40.5 43.2 39.1 41.5 41.8 42.3 42.5 41.7 38.4 37.9

▲ 0.5

Finance45.2 45.9 45.1 44.7 44.8 45.1 44.7 45.8 45.4 46.8 44.5 44.8 42.2

▲ 2.6

Construction

53.6 53.6 52.8 51.7 51.6 51.7 52.1 53.1 52.1 52.2 51.6 50.0 47.8

▲ 2.2

Real Estate

47.5 47.4 48.7 47.6 48.3 47.4 46.5 48.0 45.9 46.0 44.2 45.9 42.0

▲ 3.9

Food,BEWerages,Livestock Feed40.6 40.6 42.2 41.3 40.3 40.4 41.1 39.8 39.1 39.7 39.9 38.0 34.5

▲ 3.5

Textile,Textile Products,Clothing

38.8 39.2 39.0 36.6 36.5 36.4 36.9 36.3 36.1 34.6 32.6 30.5 29.3

▲ 1.2

Ceramics,Stone and Clay Products

45.5 44.1 45.7 45.4 43.5 43.8 45.2 44.1 44.8 43.8 40.2 39.9 37.2

▲ 2.7

Pulp, Paper and Paper Products

45.2 44.1 45.7 43.0 41.7 39.6 42.3 42.8 40.2 41.7 40.6 37.3 32.0

▲ 5.3Publishing,Printing

33.2 34.4 35.6 34.3 33.9 32.5 33.1 34.1 33.0 32.7 32.9 30.9 29.7

▲ 1.2

Chemical46.3 45.4 46.2 43.9 42.5 41.9 41.8 41.0 41.2 40.6 40.1 39.0 35.8

▲ 3.2

Steel,Nonferrous Metals,Mining

48.0 45.4 45.5 42.9 41.8 41.5 41.2 40.4 39.8 38.1 37.6 36.3 32.9

▲ 3.4

General Machinery

51.4 48.9 49.0 46.0 45.1 44.0 41.5 41.1 40.8 39.9 38.4 37.3 35.4

▲ 1.9

Electrical Machinery

47.6 46.0 44.7 43.1 43.0 42.8 43.9 41.2 42.2 40.5 40.4 41.0 38.5

▲ 2.5

Transportation Machinery,Equipment

50.9 49.3 49.4 48.1 47.5 46.4 43.4 42.3 43.5 41.2 40.9 39.4 36.5

▲ 2.9

Medical Instruments and Equipment

48.6 45.5 47.3 44.4 42.4 43.9 43.4 42.0 41.3 42.0 39.9 40.4 39.0

▲ 1.4

Other

42.1 45.3 40.2 40.2 40.2 38.0 40.7 41.8 37.4 38.4 38.0 36.9 36.8

▲ 0.1

45.8 44.5 44.8 42.9 42.0 41.5 41.4 40.6 40.3 39.6 38.6 37.6 34.9

▲ 2.7

Food,BEWerages

40.5 40.5 41.1 40.8 40.4 38.8 39.0 38.8 38.1 37.9 37.4 37.3 33.1

▲ 4.2

Textile,Textile Products,Clothing

32.0 33.6 33.2 33.2 31.6 29.8 30.8 31.6 28.8 28.8 26.5 26.2 22.0

▲ 4.2

46.5 46.4 45.6 44.7 43.8 44.7 44.6 46.0 45.1 43.4 43.1 42.8 38.5

▲ 4.3

Paper Products,Stationery,Books

36.0 39.0 39.2 39.0 36.4 37.0 37.1 38.0 37.7 36.3 35.0 34.9 33.5

▲ 1.4

Chemical44.3 44.3 44.2 41.8 41.2 42.7 42.0 42.7 41.0 40.4 39.0 38.7 35.5

▲ 3.2

Recycled Resources

45.6 48.6 41.0 40.2 37.1 32.8 32.8 30.6 34.8 29.0 33.3 30.8 27.1

▲ 3.7

Mining Products

45.0 43.7 43.4 40.8 40.4 39.0 38.8 37.6 38.0 37.0 34.8 33.9 31.9

▲ 2.0

Machinery,Equipment

46.9 46.5 45.9 44.2 44.4 43.8 43.3 44.6 42.7 42.3 41.7 41.2 38.2

▲ 3.0

Other

41.2 42.5 42.7 40.6 40.6 40.2 40.2 40.7 37.9 37.6 37.1 36.7 31.5

▲ 5.2

43.6 43.7 43.3 41.9 41.4 41.0 40.8 41.4 39.9 39.3 38.4 37.9 34.4

▲ 3.5

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 February 2020

2

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

PrFDiousMonthRetail

Food,BEWerages

41.5 42.5 42.5 44.8 42.9 41.5 41.3 41.8 40.5 40.2 38.4 39.1 36.7

▲ 2.4

Textile,Textile Products,Clothing

32.7 38.9 39.1 36.9 36.6 34.6 36.5 37.9 32.7 31.5 28.7 28.0 24.2

▲ 3.8Drugs,Sundries

39.7 39.7 40.9 41.0 38.5 40.0 37.7 40.6 35.8 37.3 40.2 37.7 34.7

▲ 3.0Furniture33.3 33.3 38.9 39.6 48.5 40.9 45.0 53.0 33.3 26.9 31.8 31.9 29.2

▲ 2.7

Information Machinery and Equipment

40.7 38.9 41.7 39.1 43.5 34.3 38.9 45.0 34.3 32.3 38.1 38.2 36.0

▲ 2.2

Motor Vehicles,Motor Vehicle Parts

44.3 45.2 43.3 41.5 42.5 39.2 41.1 41.4 34.5 31.4 31.9 36.7 32.9

▲ 3.8

Special Merchandise41.3 40.8 42.1 41.3 41.1 40.6 40.7 43.5 38.2 39.1 36.0 35.2 34.7

▲ 0.5

Various Merchandise

41.9 43.5 43.3 43.8 44.7 39.3 38.9 43.1 36.5 36.5 36.2 37.4 34.4

▲ 3.0

Other

31.3 33.3 43.8 39.6 46.3 41.7 41.7 40.5 48.1 40.7 47.9 48.1 43.9

▲ 4.2

40.8 41.4 42.1 41.6 42.0 39.5 40.2 42.6 37.0 36.1 35.8 36.3 34.1

▲ 2.2

48.2 48.1 48.2 46.7 45.6 44.5 45.5 46.0 44.9 45.1 42.6 39.5 34.0

▲ 5.5

Restaurants

41.0 37.8 42.9 40.6 42.9 39.6 38.1 43.6 37.3 39.4 40.7 41.0 32.3

▲ 8.7

Postal,Telecommunications

57.6 62.1 57.6 56.7 60.0 58.3 60.6 56.9 56.1 59.5 52.8 64.6 57.1

▲ 7.5

Electricity,Gas,Water,Heat

57.4 56.3 58.3 55.6 54.5 54.2 52.6 51.3 51.2 52.2 47.4 52.4 46.7

▲ 5.7

Leasing,Rentals

52.0 52.7 54.1 50.9 52.5 51.8 51.7 53.5 54.5 53.1 50.4 50.8 46.9

▲ 3.9

Lodging, Hotels

44.2 42.3 41.0 50.0 44.9 40.3 39.9 47.2 41.3 42.0 39.1 38.5 23.2▲ 15.3

Recreation

37.8 41.0 38.8 42.0 41.5 41.8 40.9 38.7 38.2 40.7 37.5 39.4 35.7

▲ 3.7

Broadcasting

44.4 43.3 41.7 44.1 43.3 41.1 45.2 43.1 42.9 41.7 38.2 38.1 38.9

0.8

Maintenance,Guarding,Testing

51.0 50.0 48.1 48.2 48.8 49.3 49.8 48.6 49.1 47.3 46.6 46.4 42.6

▲ 3.8

Advertising40.1 40.3 40.7 40.5 40.7 40.4 38.9 40.3 40.4 39.6 37.8 40.0 34.1

▲ 5.9

Information

59.0 60.3 59.6 58.0 57.8 58.5 58.7 57.7 57.4 57.8 56.2 56.5 54.2▲ 2.3

Labor Dispatching

54.6 53.8 53.5 53.9 52.8 52.7 51.0 53.2 53.3 50.9 46.2 49.2 42.5

▲ 6.7

Special Services

52.8 52.5 51.5 49.5 50.1 49.9 51.1 51.8 51.5 50.8 49.9 50.3 45.8

▲ 4.5

Medical,Welfare,Public Health46.5 47.1 46.9 47.8 47.0 48.7 46.5 47.3 46.5 48.5 47.7 47.8 43.2

▲ 4.6

Education

44.7 45.8 44.2 43.6 44.0 41.1 39.5 40.0 42.4 37.8 43.1 41.4 40.0

▲ 1.4

Other49.7 49.0 50.2 47.9 48.5 47.9 48.3 48.4 47.9 47.9 45.6 46.2 39.8

▲ 6.4

51.7 51.9 51.6 50.6 50.8 50.8 50.7 51.0 50.6 50.4 48.8 49.5 45.1

▲ 4.4

48.3 45.2 44.9 43.2 42.6 44.1 43.2 42.1 43.1 40.4 41.7 42.7 39.2

▲ 3.5

Electrical Household Appliances,

Total

Transportation,Warehousing

ServiceTotal

Other

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

PrFDiousMonthHokkaido

44.4 44.6 45.5 45.3 45.1 45.7 46.4 46.6 45.7 45.0 43.8 42.4 39.0

▲ 3.4Tohoku

43.1 42.8 43.1 42.2 41.9 41.7 41.7 43.2 41.9 42.2 40.9 38.8 36.7

▲ 2.1

kitakanto

44.8 44.7 44.3 43.1 42.5 42.5 42.6 42.2 40.9 40.0 40.0 39.4 36.9

▲ 2.5

minamikanto

48.1 47.8 47.7 46.0 46.0 45.5 45.7 46.1 45.5 45.5 44.3 44.5 41.1

▲ 3.4

Hokuriku

46.3 45.3 45.3 44.6 44.2 43.5 44.1 43.5 42.1 40.4 39.5 37.6 35.6

▲ 2.0

Tokai48.6 48.4 48.0 46.8 45.8 44.7 45.0 45.2 43.6 42.7 41.8 40.6 37.3

▲ 3.3

Kinki

47.6 47.3 46.9 45.0 44.6 44.0 43.8 43.9 42.2 41.9 40.5 39.8 36.3

▲ 3.5

Chugoku47.2 46.7 47.2 45.6 45.5 45.0 44.8 45.0 44.0 43.6 42.6 41.2 39.0

▲ 2.2

Shikoku47.6 46.8 46.9 46.7 44.8 43.1 43.8 43.9 44.4 44.0 43.8 42.7 39.5

▲ 3.2

Kyushu48.5 48.6 48.3 46.9 47.0 47.6 46.3 47.1 46.5 46.8 45.1 45.2 41.5

▲ 3.7

©TEIKOKUDATABANK,LTDTDB Trends Research February 20203Appendix

1.Research Subjects(Companies researched: 23,668; Validresponses: 10,704; Response rate: 45.2%)
Appendix

1.Region
Hokkaido
TohokukitaKantominamikanto
Hokuriku

531
717
779
3,399
594

Kyushu1,212
1,800596
315
761

Total

10,704

Tokai

Kinki
Chugoku
Shikoku

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

58

Finance

118

Construction

1,709

Real Estate

328

Manufacturing（2,928）

Wholesale（2,903）

Retail（453）

Food,Beverages

64

Textile,Textile Products,Clothing

31

Drugs,Sundries

25

Furniture

12

Electrical Household Appliances,Information Machinery and Equipment

38

Food,Beverages,Livestock Feed

338

Textile,Textile Products,Clothing

112

Motor Vehicles,Motor Vehicle Parts

Construction Materials,Furniture,Ceramics,Stone and Clay Products

230

Special Merchandise142

Pulp, Paper and Paper Products

101

Various Merchandise

48

Publishing,Printing

166

OthersChemical405

Transportation,Warehousing

456

Steel,Nonferrous Metals,Mining

514

Restaurants

47

General Machinery

475

Telecommunications

Electrical Machinery

331

Electricity,Gas,Water,Heat

Transportation Machinery,Equipment

11715105

Leasing,Rentals

117

Precision Machinery,Medical Instruments and Equipment

70

Lodging, Hotels

28

Others81

Recreation

57

Food,Beverages

370

Textile,Textile Products,Clothing

196Construction Materials,Furniture,Ceramics,Stone and Clay Products
Paper Products,Stationery,Books
ChemicalRecycled Resources

Service（1,714）

15

Broadcasting
Maintenance,Guarding,Testing

172

335

Advertising

104

100

Information

492

283

Labor Dispatching

62

32

Special Services

261
120

Steel,Nonferrous Metals,Mining Products

316

Medical,Welfare,Public Health

Machinery,Equipment916

Education

Others355

Others30187
37

OthersTotal

3.Size82

Large Firms

2,056

19.2%

Small to Medium-sized Firms

8,648

80.8%

micro Firms

2,962

27.7%

Total

10,704100.0%©TEIKOKUDATABANK,LTD

10,704

TDB Trends Research February 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

Industry

Internet-based survey conducted February 14 – 29 2020

Manufacturing andOther Industries*

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 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 CorporationsCompanies of all sizes in all domestic industries are eligible to participate inthe survey.

Wholesale Trade
Retail Trade
Service**Large Firms

Small to Medium-Sized Firms(Micro Firms included)

Capital: More than 300 million yen
andNo. of Employee: Over 300
Capital: More than 100 million yen
andNo. of Employee: Over 100
Capital: More than 50 million yen
andNo. of Employee: Over 50
Capital: More than 50 million yen
andNo. of Employee: Over 100

Capital: Below 300 million yenor
No. of Employee: Below 300
Capital: Below 100 million yenorNo. of Employee: Below 100
Capital: Below 50 million yenor
No. of Employee: Below 50
Capital: Below 50 million yenor
No. of Employee: Below 100

Micro Firms
No. of Employee: Below 20
No. of Employee: Below 5
No. of Employee: Below 5
No. of Employee: Below 5

Note1: Large Firms refer to companies that rank in the top 3% in terms of sales volume according to the type of business, among small to midium-sizedcorporations excluding micro firms, which are defined in Small and Medium Enterprises Basic Act.
Note2: Small to Medium-Sized Firms refer to companies that rank in the bottom 50% in terms of sales volume according to the type of business, among
those not categorized as small to midium-sized corporations in Small 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.
good

fairly goodneither good nor bad

fairly badbad

very badpoints

6543210

number of responsesfor each category

N6N5

N4N3N2N1N0Selection category Extremely good

Economic DI＝Total of (Points for each category× Number of responses for each category) 1× × 100
Number of valid responsesN6∑≡6i ≡0i × Ni

N×1× 1006©TEIKOKUDATABANK,LTDTDB Trends Research February 20205