TDB Trends Research (Research & Summary for December 2019)

Economic DI worsened for the third monthin a row, with sluggish year-end demand

e-mail：keiki@mail.tdb.co.jp～ Domestic economy has entered a recession phase,with manufacturing industry’s continuing downturn ～（Companies researched: 23,652; Valid responses: 10,292; Response rate: 43.5%;
Survey start date: May 2002)< Overview of December 2019: Recession phase >The economic diffusion index (DI) in December 2019 was 42.5, down 1.1
points from the previous month, and worsened for the third consecutive monthin a row. Domestic economy seems to have entered a recession phase, although
there are some positive factors.

By industry : Nine of the ten industries deteriorated. Manufacturingindustry deteriorated for the eighth month in a row.

< Future outlook: Moderate recession continues >With many causes of concern, such as the consumer spending trend and a
global economic slowdown, uncertainty about the domestic economy has
further intensified.

By region : There was deterioration in 36 prefectures in nine of the tenregions. Urban depression was noticeable.

By size : All sizes deteriorated for the third month in a row. “Largeenterprises” significantly deteriorated for the first time in five years andeight months.

52504846444240
383649.4

48.1

47.2 46.9 46.8
45.4 45.1

44.6 44.7 45.0

43.9 43.6

42.5 42.0

41.6 41.5 41.1

40.6 40.3 40.2

39.8 39.6

39.3

39.2

39.0

After 1 month After 3 months（Prediction→）
After 6 months
After 1 year
Dec Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec201820192020
Projected future DI
49.4 48.1 47.2 46.9 46.8 45.4 45.1 44.6 44.7 45.0 43.9 43.6 42.5 42.0 41.6 41.5 41.1 40.6 40.3 40.2 39.8 39.6 39.3 39.2 39.0
Change from December.2019-0.5 -0.9 -1.0 -1.4 -1.9 -2.2 -2.3 -2.7 -2.9 -3.2 -3.3 -3.5*: Economic DIs are calculated based on the structural ARIMA model, in which economic statistics are incorporated to the ARIMA model.

©TEIKOKUDATABANK,LTDTDB Trends Research December 20191Economic Diffusion Index (Economic DI)1/2Ratio to tHH
Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19

PrFDiousMonthTotal

49.4 48.1 47.2 46.9 46.8 45.4 45.1 44.6 44.7 45.0 43.9 43.6 42.5

▲ 1.1

Large Firms

51.7 50.6 49.8 49.8 49.7 48.8 48.7 47.7 47.9 48.0 47.1 47.0 45.7

▲ 1.3

Small to Medium-sized Firms

48.8 47.4 46.5 46.2 46.1 44.6 44.2 43.9 43.9 44.2 43.2 42.8 41.7

▲ 1.1

Micro Firms

48.2 47.0 46.5 46.3 46.2 44.5 44.1 43.8 44.2 45.1 43.9 43.5 42.1

▲ 1.4

Ratio to tHH
Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19

PrFDious
Month

Agriculture,Forestry,Fisheries

40.7 41.8 41.7 42.3 41.3 40.5 43.2 39.1 41.5 41.8 42.3 42.5 41.7

▲ 0.8

Finance46.5 46.1 45.2 45.9 45.1 44.7 44.8 45.1 44.7 45.8 45.4 46.8 44.5

▲ 2.3

Construction

54.1 53.9 53.6 53.6 52.8 51.7 51.6 51.7 52.1 53.1 52.1 52.2 51.6

▲ 0.6

Real Estate

49.7 49.1 47.5 47.4 48.7 47.6 48.3 47.4 46.5 48.0 45.9 46.0 44.2

▲ 1.8

Food,BEWerages,Livestock Feed

43.0 41.6 40.6 40.6 42.2 41.3 40.3 40.4 41.1 39.8 39.1 39.7 39.9

0.2

Textile,Textile Products,Clothing

41.3 37.7 38.8 39.2 39.0 36.6 36.5 36.4 36.9 36.3 36.1 34.6 32.6

▲ 2.0

Ceramics,Stone and Clay Products

48.3 47.1 45.5 44.1 45.7 45.4 43.5 43.8 45.2 44.1 44.8 43.8 40.2

▲ 3.6

Pulp, Paper and Paper Products

49.3 44.6 45.2 44.1 45.7 43.0 41.7 39.6 42.3 42.8 40.2 41.7 40.6

▲ 1.1

Publishing,Printing

35.0 33.5 33.2 34.4 35.6 34.3 33.9 32.5 33.1 34.1 33.0 32.7 32.9

0.2

Chemical50.2 48.1 46.3 45.4 46.2 43.9 42.5 41.9 41.8 41.0 41.2 40.6 40.1

▲ 0.5

Steel,Nonferrous Metals,Mining

52.5 50.4 48.0 45.4 45.5 42.9 41.8 41.5 41.2 40.4 39.8 38.1 37.6

▲ 0.5

General Machinery

55.9 52.5 51.4 48.9 49.0 46.0 45.1 44.0 41.5 41.1 40.8 39.9 38.4

▲ 1.5

Electrical Machinery

50.5 49.2 47.6 46.0 44.7 43.1 43.0 42.8 43.9 41.2 42.2 40.5 40.4

▲ 0.1

Transportation Machinery,Equipment

53.8 52.3 50.9 49.3 49.4 48.1 47.5 46.4 43.4 42.3 43.5 41.2 40.9

▲ 0.3

Medical Instruments and Equipment

54.0 51.3 48.6 45.5 47.3 44.4 42.4 43.9 43.4 42.0 41.3 42.0 39.9

▲ 2.1

Other

42.8 42.7 42.1 45.3 40.2 40.2 40.2 38.0 40.7 41.8 37.4 38.4 38.0

▲ 0.4

49.2 47.1 45.8 44.5 44.8 42.9 42.0 41.5 41.4 40.6 40.3 39.6 38.6

▲ 1.0

Food,BEWerages

41.1 39.4 40.5 40.5 41.1 40.8 40.4 38.8 39.0 38.8 38.1 37.9 37.4

▲ 0.5

Textile,Textile Products,Clothing

34.3 34.0 32.0 33.6 33.2 33.2 31.6 29.8 30.8 31.6 28.8 28.8 26.5

▲ 2.3

47.8 47.4 46.5 46.4 45.6 44.7 43.8 44.7 44.6 46.0 45.1 43.4 43.1

▲ 0.3

Paper Products,Stationery,Books

39.3 37.9 36.0 39.0 39.2 39.0 36.4 37.0 37.1 38.0 37.7 36.3 35.0

▲ 1.3

Chemical47.7 45.3 44.3 44.3 44.2 41.8 41.2 42.7 42.0 42.7 41.0 40.4 39.0

▲ 1.4

Recycled Resources

47.6 39.8 45.6 48.6 41.0 40.2 37.1 32.8 32.8 30.6 34.8 29.0 33.3

4.3

Mining Products

50.2 46.3 45.0 43.7 43.4 40.8 40.4 39.0 38.8 37.6 38.0 37.0 34.8

▲ 2.2

Machinery,Equipment

50.0 48.4 46.9 46.5 45.9 44.2 44.4 43.8 43.3 44.6 42.7 42.3 41.7

▲ 0.6

Other

43.9 41.9 41.2 42.5 42.7 40.6 40.6 40.2 40.2 40.7 37.9 37.6 37.1

▲ 0.5

46.3 44.4 43.6 43.7 43.3 41.9 41.4 41.0 40.8 41.4 39.9 39.3 38.4

▲ 0.9

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 December 20192

Economic Diffusion Index (Economic DI)2/2
Ratio to tHH
Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19

PrFDious
MonthRetailFood,BEWerages

42.8 43.4 41.5 42.5 42.5 44.8 42.9 41.5 41.3 41.8 40.5 40.2 38.4

▲ 1.8

Textile,Textile Products,Clothing

34.0 30.9 32.7 38.9 39.1 36.9 36.6 34.6 36.5 37.9 32.7 31.5 28.7

▲ 2.8

Drugs,Sundries

44.4 44.8 39.7 39.7 40.9 41.0 38.5 40.0 37.7 40.6 35.8 37.3 40.2

2.9Furniture

35.4 38.9 33.3 33.3 38.9 39.6 48.5 40.9 45.0 53.0 33.3 26.9 31.8

4.9

Information Machinery and Equipment

43.1 39.0 40.7 38.9 41.7 39.1 43.5 34.3 38.9 45.0 34.3 32.3 38.1

5.8

Motor Vehicles,Motor Vehicle Parts

42.2 44.6 44.3 45.2 43.3 41.5 42.5 39.2 41.1 41.4 34.5 31.4 31.90.5

Special Merchandise

43.2 41.9 41.3 40.8 42.1 41.3 41.1 40.6 40.7 43.5 38.2 39.1 36.0

▲ 3.1

Various Merchandise

44.7 42.9 41.9 43.5 43.3 43.8 44.7 39.3 38.9 43.1 36.5 36.5 36.2

▲ 0.3

Other35.7 35.7 31.3 33.3 43.8 39.6 46.3 41.7 41.7 40.5 48.1 40.7 47.9

7.2

42.3 41.6 40.8 41.4 42.1 41.6 42.0 39.5 40.2 42.6 37.0 36.1 35.8

▲ 0.3

50.5 49.1 48.2 48.1 48.2 46.7 45.6 44.5 45.5 46.0 44.9 45.1 42.6

▲ 2.5

Electrical Household Appliances,

Total

Transportation,Warehousing

Service

Restaurants

40.7 37.9 41.0 37.8 42.9 40.6 42.9 39.6 38.1 43.6 37.3 39.4 40.7

1.3

Postal,Telecommunications

54.5 60.0 57.6 62.1 57.6 56.7 60.0 58.3 60.6 56.9 56.1 59.5 52.8

▲ 6.7

Electricity,Gas,Water,Heat

61.9 57.4 57.4 56.3 58.3 55.6 54.5 54.2 52.6 51.3 51.2 52.2 47.4

▲ 4.8

Leasing,Rentals

55.7 55.0 52.0 52.7 54.1 50.9 52.5 51.8 51.7 53.5 54.5 53.1 50.4

▲ 2.7

Lodging, Hotels

45.7 44.9 44.2 42.3 41.0 50.0 44.9 40.3 39.9 47.2 41.3 42.0 39.1

▲ 2.9

Recreation

39.3 38.9 37.8 41.0 38.8 42.0 41.5 41.8 40.9 38.7 38.2 40.7 37.5

▲ 3.2

Broadcasting

36.7 40.5 44.4 43.3 41.7 44.1 43.3 41.1 45.2 43.1 42.9 41.7 38.2

▲ 3.5

Maintenance,Guarding,Testing

50.7 50.7 51.0 50.0 48.1 48.2 48.8 49.3 49.8 48.6 49.1 47.3 46.6

▲ 0.7

Advertising

41.7 40.4 40.1 40.3 40.7 40.5 40.7 40.4 38.9 40.3 40.4 39.6 37.8

▲ 1.8

Information

59.3 60.1 59.0 60.3 59.6 58.0 57.8 58.5 58.7 57.7 57.4 57.8 56.2

▲ 1.6

Labor Dispatching

59.0 57.2 54.6 53.8 53.5 53.9 52.8 52.7 51.0 53.2 53.3 50.9 46.2

▲ 4.7

Special Services

53.6 53.5 52.8 52.5 51.5 49.5 50.1 49.9 51.1 51.8 51.5 50.8 49.9

▲ 0.9

Medical,Welfare,Public Health47.4 47.5 46.5 47.1 46.9 47.8 47.0 48.7 46.5 47.3 46.5 48.5 47.7

▲ 0.8

Education

46.2 38.5 44.7 45.8 44.2 43.6 44.0 41.1 39.5 40.0 42.4 37.8 43.1

5.3

Other52.0 50.2 49.7 49.0 50.2 47.9 48.5 47.9 48.3 48.4 47.9 47.9 45.6

▲ 2.352.7 52.4 51.7 51.9 51.6 50.6 50.8 50.8 50.7 51.0 50.6 50.4 48.8

▲ 1.646.6 44.1 48.3 45.2 44.9 43.2 42.6 44.1 43.2 42.1 43.1 40.4 41.7

1.3Total

Other

Ratio to tHH
Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19

PrFDiousMonthHokkaido

45.2 43.9 44.4 44.6 45.5 45.3 45.1 45.7 46.4 46.6 45.7 45.0 43.8

▲ 1.2Tohoku

45.4 44.4 43.1 42.8 43.1 42.2 41.9 41.7 41.7 43.2 41.9 42.2 40.9

▲ 1.3

kitakanto

48.5 45.8 44.8 44.7 44.3 43.1 42.5 42.5 42.6 42.2 40.9 40.0 40.0

0.0

minamikanto

50.1 49.0 48.1 47.8 47.7 46.0 46.0 45.5 45.7 46.1 45.5 45.5 44.3

▲ 1.2

Hokuriku

48.6 47.7 46.3 45.3 45.3 44.6 44.2 43.5 44.1 43.5 42.1 40.4 39.5

▲ 0.9

Tokai

51.8 50.1 48.6 48.4 48.0 46.8 45.8 44.7 45.0 45.2 43.6 42.7 41.8

▲ 0.9

Kinki49.7 48.4 47.6 47.3 46.9 45.0 44.6 44.0 43.8 43.9 42.2 41.9 40.5

▲ 1.4Chugoku

48.7 47.7 47.2 46.7 47.2 45.6 45.5 45.0 44.8 45.0 44.0 43.6 42.6

▲ 1.0

Shikoku

48.4 46.8 47.6 46.8 46.9 46.7 44.8 43.1 43.8 43.9 44.4 44.0 43.8

▲ 0.2

Kyushu50.7 49.7 48.5 48.6 48.3 46.9 47.0 47.6 46.3 47.1 46.5 46.8 45.1

▲ 1.7

©TEIKOKUDATABANK,LTD

TDB Trends Research December 20193Appendix

1.Research Subjects(Companies researched: 23,652; Validresponses: 10,292; Response rate: 43.5%)
Appendix

1.Region
Hokkaido
TohokukitaKantominamikanto
Hokuriku

517
664
735
3,339
568

Kyushu

1,147
1,732
567
297
726

Total

10,292

Tokai

Kinki
Chugoku
Shikoku

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

56

Finance

119

Construction

1,568

Real Estate318（2,878）Wholesale（2,807）

69

Textile,Textile Products,Clothing

29

Drugs,Sundries

22

Furniture

11

Electrical Household Appliances,Information Machinery and Equipment

35

Food,Beverages,Livestock Feed

316

Textile,Textile Products,Clothing

116

Motor Vehicles,Motor Vehicle Parts

Construction Materials,Furniture,Ceramics,Stone and Clay Products

221

Special Merchandise

135

96

Various Merchandise

46

Pulp, Paper and Paper Products

Manufacturing

Retail（423）

Food,Beverages

Publishing,Printing

182

Chemical

400

Transportation,Warehousing

438

Steel,Nonferrous Metals,Mining

510

Restaurants

50

General Machinery

453

Telecommunications

Electrical Machinery

331

Electricity,Gas,Water,Heat

Transportation Machinery,Equipment

8

Others613

101

Leasing,Rentals

120

Precision Machinery,Medical Instruments and Equipment

74

Lodging, Hotels

26

Others78

Recreation

52

Food,Beverages

339

Textile,Textile Products,Clothing

176

Construction Materials,Furniture,Ceramics,Stone and Clay Products

332

Advertising

97

Paper Products,Stationery,Books

100

Information

463

Chemical

269

Labor Dispatching

57

32

Special Services

260
116

Recycled Resources

Service（1,647）

17

Broadcasting
Maintenance,Guarding,Testing

Steel,Nonferrous Metals,Mining Products

317

Medical,Welfare,Public Health

Machinery,Equipment907

Education

Others335

Others2938
Total

Large Firms

2,007

19.5%

Small to Medium-sized Firms

8,285

80.5%

micro Firms

2,787

27.1%

Total

10,292100.0%©TEIKOKUDATABANK,LTD

161

180

Others

3.Size68

10,292TDB Trends Research December 20194

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 December 16 2019 – January 6 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 Corporations
Companies 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 yenor
No. 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

6543210number of responses
for each category

N6N5N4N3N2N1N0Selection category Extremely goodEconomic 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 December 20195