1. Trend of the Machine Industry in Japan

1. Trend of the Machine Industry in Japan
1.1. Trend of the production, shipment, etc. of the machine industry(1) Trend of the machine industry in the past five years

The production index of the machine industry (excluding steel vessels and railway vehicles) in2008 showed a decrease to -4.1 points, falling from the level in the previous year. Behind this was
the fact that, while the output of precision machines rose, that of general machines, electronic partsand devices, transportation machines and information and communication machines all decreased.
The shipment index also fell compared with the previous year’s level because just as in the case of
production index, this index declined for general machines, electronic parts and devices,transportation machines and information and communication machines although that of precision
machines increased. The inventory index rose to +7.7 points, higher than in 2007, and this was
because the inventory index of electronic parts and devices, information and communication
machines and general machines increased although that of transportation machines fell. The
inventory ratio rose to +10.0 points, a higher level than that in the previous year.

Fig. 1.1.1

Trend of the industrial indexes of the entire machine industry(year-on-year basis)

16
14
12
10
Production
Production
8
Shipment
Shipment
6
Inventory
Inventory

4

Inventory
ratio
Inventory ratio

2
0
-2

2004

2005

2006

2007

2008

-4
-6

Source:Based on the Ministry of Economy, Trade and Industry, “Annual Report of Machinery Statistics.”

The trend of the production, shipment and inventory indexes and inventory ratio of the machineindustry (excluding steel vessels and railway vehicles) on a year-on-year basis from 2004 to 2008 is
as shown in Figure 1.1.1. As evident from this figure, the production index had been positive until
2007 but fell sharply in 2008. The shipment and inventory indexes turned into a decrease at the sametime. By contrast, the inventory index and inventory ratio showed a downward trend in 2007 but
11. Trend of the Machine Industry in Japan

greatly rose in 2008, and the inventory index (as compared with the previous year) was higher thanin 2004.
The probable factor contributing to the downturn of the machine industry in 2008 is slackening
in transportation machines due to the Lehman shock-caused worldwide recession starting in
September 2008, which began to affect general machines, etc., too, and was reflected on the statistics
for 2008.
The trend of the machine industry indexes by business category is as shown in Figure 1.1.2. As
this figure indicates, a great declining tendency is observed in all of the industrial indexes regardlessof business category, and the figures in 2008 were negative for all of the business categories
excluding precision machines. The sharpest decrease was seen in electronic parts and devices.
Another important characteristic in 2008 was the fact that transportation machines and generalmachines, which had remained relatively firm in the past several years, entered a decreasing phase.

Fig. 1.1.2

Trend of the production index of the machine industry by businesscategory (year-on-year basis)

20

15

Generalmachines
General machines
Electric
machines
Electric machines

10

Information
andInformation andcommunication machinescommunication
machines
Electronicpartsand
anddevices
Electronic parts
devices
Transportation
machines
Transportation machines

5

0
2004

2005

2006

2007

2008

Precisionmachines
Precision machines

-5

-10

Source:Same as that for Fig. 1.1.1.

Figures 1.1.3 and 1.1.4 show the trend of the production and shipment indexes of the machineindustry (excluding steel vessels and railway vehicles) as a whole and by business category
supposing that the figure for 2005 were 100. First, the production index of the entire machineindustry in 2008 was 108.9 points, which was higher than that in the base year 2005 by 8.9 points
and on a similar level to that in 2006. Thus, the machine industry in 2008 recorded a better
production index than in the base year 2005 as a whole, although it began to feel the impact of theLehman shock. Behind this was the situation where precision machines continued to attain a good
performance of 117.6 points and electronic parts and devices registered 126.3 points, which were2

1. Trend of the Machine Industry in Japan

smaller than in 2007 but relatively favorable results. It can also be seen that transportation machines
had a similar level to that in the previous year with 111.6 points. On the other hand, generalmachines and electric machines saw a similar level to 2005 with 100.4 points, and information andcommunication machines had 103.2 points, suffering a fall of 5.2 points from 2007. In the years
ahead, it is feared that a rapid cool-off in the North American market after the Lehman shock will
result in a prolonged stagnation in transportation machines and general machines.

Fig. 1.1.3

Trend of the production index of the machine industry (2005=100)

Production index(2005=100)

135
130
125
120
115
110
105
100
95
90
85
80

Source:

2004

2005

2006

2007

2008

Machine industry (excluding
steel vessels and railway
vehicles)

96.8

100

108.5

113.5

108.9

General machines

94.8

100

106.4

109.2

100.4

Electric machines

99.1

100

104.5

103.2

100.4

Information andcommunication machines

99.7

100

106.4

108.4

103.2

Electronic parts and devices

98.1

100

117.8

131

126.3

Transportation machines(excluding steel vessels andrailway vehicles)

96.5

100

107.6

113.5

111.6

Precision machines

90.7

100

108.1

114.9

117.6

Same as that for Fig. 1.1.1.

The shipment index of the entire machine industry (Fig. 1.1.4) in 2008 was 110.1 points or an
increase of 10.1 points over that in the base year 2005. This was a drop of 4 points from 2007 but
can be regarded as a relatively high level. By business category, the figure for general machines was
100.1 points, close to that for 2005, showing a marked decline. Electric machines also continued to3

1. Trend of the Machine Industry in Japandecrease as in 2007 and stayed at 102.5 points. Information and communication machines registered
109.6 points, remaining steady although not so high as in 2007, and also firm were electronic partsand devices (122.6 points) and transportation machines (113.4 points). While almost all of thebusiness categories suffered a fall in points from 2007, only precision machines enjoyed a better
performance of 117.6 points (up 6.8 points over 2007).

Fig. 1.1.4

Trend of the shipment index of the machine industry (2005=100)

Shipment index(2005=100)

130
125
120
115
110
105
100
95
90
85
80

Machine industry (excluding
steel vessels and railway
vehicles)

Source:

2004

2005

2006

2007

2008

96.8

100

108.4

114.1

110.1

General machines

95

100

106.6

109.9

100.1

Electric machines

97.3

100

104.7

104.2

102.5

Information andcommunication machines

98.2

100

105.3

110.2

109.6

Electronic parts and devices

96.6

100

116.4

129.9

122.6

Transportation machines(excluding steel vessels andrailway vehicles)

97.7

100

108.4

114.7

113.4

Precision machines

89.9

100

104.8

110.8

117.6

Same as that for Fig. 1.1.1.

(2) Trend of the general machine industry

As shown in Figure 1.1.5, the production index of the general machine industry (boilers andmotors, civil engineering and construction machines, chemical machines, life-related industrial
machines, semiconductors and flat-panel devices, wind-powered and hydraulic machines and oilpressure equipment, conveying and carrying machines, industrial robots, farm machines, metal

4

1. Trend of the Machine Industry in Japanmachine tools, metal working machines, textile machines, freezers and applied products, dies,machinery tools, other general machines and general machine parts) in 2008 decreased to -8.1 points,
a fall for the first time in six years. The impact of the decreased production of semiconductors andflat-panel devices, civil engineering and construction machines, boilers and motors, textile machines
and other general machines can be pointed out as the reason for this. The shipment index also fell to-8.9 points, a decline after an interval of six years just as for the production index. The cause was thesame as that for the production index: the lower shipment of semiconductors and flat-panel devices,civil engineering and construction machines, boilers and motors, textile machines, etc. By contrast,
the inventory index increased to +5.7 points, a rise for the fifth consecutive year. The factor behind
this is the fact that while the output of freezers and applied products, farm machines, etc. decreased,that of civil engineering and construction machines, general machine parts, boilers and motors, etc.
grew. The inventory ratio rose to +11.2 points, an increase for two straight years.

Fig. 1.1.5

Trend of the industrial indexes of the general machine industry(year-on-year basis)

20
15
10

Production
Production
Shipment
Shipment

5

Inventory
Inventory
0
2004

2005

2006

2007

2008

Inventory
Inventory ratio
ratio

-5
-10
-15

Source:Same as that for Fig. 1.1.1.

Figure 1.1.6 shows the trend of the industrial indexes of the general machine industry bybusiness category. As evident from this figure, the business categories recording positive points werefarm machines (+9.1 points) and chemical machines (+5.0 points) only, while all of the other generalmachine industries had a negative figure. Textile machines (-29.1 points) registered the lowest levelas a reaction to the good performance in 2006 and 2007. Semiconductors and flat-panel devices
started to be on the decrease in 2007 and had a further fall to -29.0 points in 2008. All of the otherbusiness categories registered a negative index, too: other general machines (-14.7 points), civilengineering and construction machines (-11.1 points), freezers and applied products (-8.1 points),
industrial robots (-7.5 points) and boilers and motors (-7.3 points). The above figures indicate that a5

1. Trend of the Machine Industry in Japan

rapid cutback in the production of automobiles for the U.S. market owing to the Lehman shock in
September 2008 started to greatly affect the general machine industry, the manufacturer of
production goods.

Fig. 1.1.6

Trend of the production indexes of the general machine industry bybusiness category (year-on-year basis)

80
Boilers
Boilersand
andmotors
motors

Civilengineeringengineering andCivil
and construction
construction
machinesmachines
60

ChemicalChemicalmachines
machines
Life-related
machines
Life-relatedindustrial
industrial machines

Semiconductorsand
and flat-panel
flat-panel
Semiconductors
devices
devicesWind-poweredandand hydraulichydraulic
Wind-poweredmachinesand
andoiloil pressurepressure equipment
equipmentmachines

40

Conveying
Conveyingand
and carrying
carrying machines
machines
Industrial
Industrialrobots
robots20

Farm
Farmmachines
machines
Metal
Metalmachinemachine tools
tools
Metal
Metalworking
workingmachines
machines

0
2004

2005

2006

2007

2008

TextileTextilemachines
machines
Freezers
Freezersand
andapplied
applied products
products
Dies
Dies

-20

Machinery
Machinerytools
tools
Other
Othergeneralgeneralmachines
machines
GeneralGeneralmachinemachine parts-40

Source:Same as that for Fig. 1.1.1.

6

1. Trend of the Machine Industry in Japan(3) Trend of the electric machine industry

As Figure 1.1.7 shows, the production index of the electric machine industry (rotary electricmachines, stationary electric machines, switching devices and equipment, consumer electricmachines, wiring/lighting appliances, electronic application devices, batteries and other electricmachines) in 2008 was -2.7 points, a fall year on year, continuing the declining trend of 2007. A
substantial decrease in the output of electric measuring instruments as described later and the falling
production of electronic application devices, which had been relatively steady in the past several
years, can be pointed out as main reasons behind this. The shipment index increased a downward
trend as the production index, and the sluggish sentiment about the electric machine industry was
undeniable. As the production and shipment indexes increased the falling tendency, the inventoryindex in 2008 considerably rose and the inventory ratio also showed a positive figure, turning fromthe downward trend in the past.

Fig. 1.1.7

Trend of the industrial indexes of the electric machine industry(year-on-year basis)

15

10

5

Production
Production
Shipment
Shipment

0
2004

2005

2006

2007

2008

Inventory
Inventory
Inventory
Inventoryratio
ratio

-5

-10

-15

Source:Same as that for Fig. 1.1.1.

The trend of the production index of the electric machine industry by business category is asshown in Figure 1.1.8. From this figure, it can be seen that the performance of batteries and otherelectric machines were very favorable in 2008. The production index of batteries in 2008 was +12.9
points, attaining a high in these several years. Other electric machines turned into a positive figure of
11.5 points from -9.7 points in 2007, achieving a rapid recovery. Stationary electric machines werealso firm, keeping a level of +7 points or so since 2006. On the other hand, the production index ofelectric measuring instruments entered a negative phase in 2007 and increased this trend in 2008,
registering -23.1 points. Another segment suffering a substantial fall in the production index was thatof electronic application devices; this product segment had a positive figure until 2007 but suffered a
sharp fall to -9.9 points in 2008.

7

1. Trend of the Machine Industry in Japan

Fig. 1.1.8

Trend of the production index of the electric machine industry
by business category (year-on-year basis)

40
Rotaryelectric machines
machines
Rotary electric
30

Stationary
electricmachines
machines
Stationary electric20

Switchingdevicesand
andequipment
Switching devices
equipment
Consumer electric
electricmachines
machines

10

Wiring/lighting
appliances
Wiring/lighting appliances
0
2004

2005

2006

2007

Electronic
applicationdevices
devices
Electronic application

2008

Electric
measuringinstruments
instruments
Electric measuring-10

Batteries
Batteries-20

Other electric
electricmachines
machines-30

Source:Same as that for Fig. 1.1.1.

(4) Trend of the information and communication machine industry

Figure 1.1.9 shows the industrial indexes of the information and communication machineindustry (communication machines, consumer electronic machines, electric computers and otherinformation and communication machines). As evident from this figure, the industrial indexes of thisindustry entered a decreasing phase in 2008; the production index was -4.8 points and the shipment
index, -0.5 points.

Fig. 1.1.9 Trend of the industrial indexes of the information andcommunication machine industry (year-on-year basis)
40

30

Production
Production

20

Shipment
Shipment
10

Inventory
Inventory
Inventoryratio
ratio
Inventory

0
2004

2005

2006

2007

-10

-20

Source:Same as that for Fig. 1.1.1.

8

2008

1. Trend of the Machine Industry in JapanThe trend of the production index of the information and communication machine industry bybusiness category is as shown in Figure 1.1.10. As this figure indicates, the production index ofcommunication machines was -14.1 points, a substantial decrease from the previous year. That ofother information and communication machines, which was relatively high with +6.7 points in 2007,
showed a great decline to -10.8 points in 2008. The production index of electric computers was in a
downward trend already in 2007 and went down further to -4.5 points in 2008. As a result, consumer
electronic machines were the only segment of the information and communication machine industry
that registered a positive production index of +4.2 points in 2008. This segment had a production
index over +10 points until 2007 but experienced a marked fall to less than 10 points in 2008.

Fig. 1.1.10

Trend of the production index of the information and communication
machine industry by business category (year-on-year basis)

20
15
10
Communication
machines
Communication machines

5
0
-5

2004

2005

2006

2007

2008

Consumer
Consumerelectronic
electronic machines
machines
Electronic
Electronic computers
computers
Other
Otherinformation
information andandcommunication machinescommunication
machines

-10
-15
-20
-25

Source:Same as that for Fig. 1.1.1.

(5) Trend of the electronic parts and device industry

Figure 1.1.11 shows the industrial indexes of the electronic parts and device industry (electronicparts, semiconductor devices, integrated circuits and semiconductor parts). As seen in this figure, theproduction index in 2008 was -3.6 points, a lower level than in the previous year. The shipment
index had kept a favorable tendency during the past several years, but suffered a sudden drop in
2008. The shipment index also declined to -5.6 points at the same time as the production index.
Reflecting the sluggishness of both the production and shipment indexes, the inventory index in2008 considerably rose to +46.3 points, which were larger than +38.5 points in 2006. Similarly, theinventory ratio increased to +30.9 points, much more than +11.5 points in 2007. What can be pointed
out as the reasons behind these situations are weak domestic demand and the fact that as the global
market for electronic parts and device was in confusion, price competition intensified further.

91. Trend of the Machine Industry in Japan

Fig. 1.1.11 Trend of the industrial indexes of the electronic parts and device industry(year-on-year basis)
50
40
30

Production
Production
20

Shipment
Shipment
Inventory
Inventory

10

Inventory
Inventoryratio
ratio
0
2004

2005

2006

2007

2008

-10
-20

Source:Same as that for Fig. 1.1.1.

The trend of the production index of the electronic parts and device industry by businesscategory is as shown in Figure 1.1.12. As evident from this figure, the index of integrated circuits
greatly decreased from +13.4 points in 2007 to -8.1 points in 2008. That of semiconductor parts also
fell from +13.3 points in 2007 to -3.9 points in 2008. The index of semiconductor devices turned intoa negative one, too.

Fig. 1.1.12

Trend of the production index of the electronic parts and device industry
by business category (year-on-year basis)

35
30
25
Electronic
Electronicparts
parts

20

Semiconductor
Semiconductor devices
devices
Integrated
Integrated circuits
circuits
Semiconductor
Semiconductor parts
parts

15
10
5
0
-5

2004

2005

2006

2007

-10
-15

Source:Same as that for Fig. 1.1.1.

10

2008

1. Trend of the Machine Industry in Japan(6) Trend of the transportation machine industry

Figure 1.1.13 shows the industrial indexes of the transportation machine industry (passenger
cars, buses, trucks, automotive parts, two-wheeled vehicles and industrial vehicles). As this figure
indicates, the production index of the transportation machine industry in 2008 was -1.7 points,
suddenly turning into a decreasing stage from the positive figures of 5 points or so recorded until
2007. The shipment index declined to -1.1 points, too. In addition, the inventory index greatly dropped
to -17.3 points, and the inventory ratio entered a downward phase. The main factor contributing tothis discouraging situation is the fact that while transportation machines had enjoyed a good
performance until the first half of 2008, overseas demand for these products started a rapid decline in
the second half affected by the Lehman shock and manufacturers all began to reduce production.

Fig. 1.1.13

Trend of the industrial indexes of the transportation machine industry(year-on-year basis)

50
40
30

Production
Production

20

Shipment
Shipment
10

Inventory
Inventory

0

Inventory
Inventoryratio
ratio
2004

2005

2006

2007

2008

-10
-20
-30

Source:Same as that for Fig. 1.1.1.

The trend of the production index of the transportation machine industry by business category
is as shown in Figure 1.1.14. As seen in this figure, a notable tendency in 2008 was a sharp drop in
the production index of two-wheeled vehicles. The index of these vehicles was already in adecreasing trend in 2007 with -6.0 points and further fell to -24.9 points in 2008. The situation where
young people continued to move away from two-wheelers in Japan can be mentioned as the reason
behind this, and it is supposed that poorer overseas demand caused by the impact of the Lehman
shock affected domestic output. Another characteristic in 2008 is that the index of passenger cars
experienced a downward phase, and at the same time the index of automotive parts, which had
achieved relatively good results in the past, fell to -3.6 points. Trucks had -0.5 points but showed arecovering trend a little. Only products enjoying favorable results were buses, recording a high levelof +17.1 points, although this was lower than +21.1 points in 2007.

11

1. Trend of the Machine Industry in Japan

Fig. 1.1.14

Trend of the production index of the transportation machine industry(year-on-year basis)

30

20
Passenger
Passenger cars
cars
10

Buses
Buses
TrucksTrucks

0
2004

2005

2006

2007

2008

Automotive
parts
Automotive partsTwo-wheeled vehicles
Two-wheeledvehicles-10

Industrial vehicles
vehiclesIndustrial
-20

-30

Source:Same as that for Fig. 1.1.1.

(7) Trend of the precision machine industry

Figure 1.1.15 shows the industrial indexes of the precision machine industry (measuring
instruments, optical machines and parts, and timepieces). As evident from this figure, the production
index of the precision machine industry in 2008 kept a positive figure of +2.3 points although thelevel was the lowest in the past several years. The shipment index was +1.6 points, a relatively good
figure. The inventory index and inventory ratio have tended to show a positive and negative figure
every three years, and in 2008, it suddenly turned into a negative one.

Fig. 1.1.15

Trend of the industrial indexes of the precision machine industry(year-on-year basis)

30
25
20
15

Production
Production

10

Shipment
Shipment

5

Inventory
Inventory

0
-5

2004

2005

2006

2007

-10
-15
-20

Source:Same as that for Fig. 1.1.1.

12

2008

Inventory
Inventory ratio
ratio

1. Trend of the Machine Industry in Japan

The production index of the precision machine industry by business category as compared withthe previous year is as shown in Figure 1.1.16. As indicated in this figure, timepieces suffered a big
drop; their production index in 2008 was -10.4 points, a level lower than -8.6 points in the previous
year. By contrast, optical machines and parts kept a good result with +12.3 points, although this was
lower than +24.1 points in 2007. The index of measuring instruments has continued to fall since2006 and was +1.6 points. As summarized above, the production index by business category in 2008(as compared with the previous year) was generally on a downward trend: while optical machines
and parts, which are related to the medical care and test device fields, kept up a high level, it is
supposed that the area of measuring instruments, which depends on the situation of capital
investment, was influenced by the Lehman shock and in a declining phase as the world economy
stagnated. For timepieces, the introduction of some popular products, such as new mechanicaltimepieces, can be regarded as a flash of hope. However, because the production system of
timepieces is a combined-type one adopted after the introduction of digital products, it is now totally
integrated into the network of global supply chains rather than that of domestic production, andtimepiece functions have been built in cellular phones. For these reasons, the situation where no
rapid expansion in domestic demand can be expected will continue in the years ahead.

Fig. 1.1.16

Trend of the production index of the precision machine industry
by business category (year-on-year basis)

30
25
20
15

Measuring
Measuring instruments
instruments
Optical
Optical machines
machines and partsand parts
Timepieces
Timepieces

10
5
0
-5

2004

2005

2006

2007

-10
-15

Source:Same as that for Fig. 1.1.1.

13

2008

1. Trend of the Machine Industry in Japan

1.2. Trend of the industrial indexes of the machine industry in 2008
(1) Trend of the production index in 2008 by quarter

Figure 1.2.1 shows the trend of the production index (seasonally adjusted; 2005=100) in 2008by quarter of the entire machine industry and its main branch industries. As shown in this figure, theproduction index of the entire machine industry (excluding steel vessels and railway vehicles)
declined in points in all of its main branch industries in the IInd quarter and after, showing a marked
downward trend especially in the IIIrd and IVth quarters. In the IVth quarter, all of the branchindustries, except electronic parts and devices and precision machines, had a fall from the level inthe base year 2005, driven into a very difficult situation. By main branch industry, the generalmachine industry registered over 100 points until the IInd quarter but fell to 99.0 points in the IIIrd
quarter and to 88.9 points in the IVth quarter. The electric machine industry managed to secure over
100 points until the IIIrd quarter but declined to 94.1 points in the IVth quarter. The information andcommunication machine industry started to increase a downward trend in the IIIrd quarter and went
below the 100-point mark in the IVth quarter. The electronic parts and device industry was able toregister over 100 points until the IVth quarter but the performance in the IVth quarter was a sharp
decrease to 102.9 points from 127.2 points in the IIIrd quarter. The transportation machine industry(excluding steel vessels and railway vehicles) did well until the IIIrd quarter, recording over 110
points, but fell suddenly to 93.1 points in the IVth quarter, showing a noticeable declining tendency.
Finally, the precision machine industry, together with the electronic parts and device industry,
recorded more than 100 points until the IVth quarter, when it enjoyed a high level of 110.3 points
while the electronic parts and device industry decreased its index to 102.9 points. As summarized
above, the production index of the machine industry in 2008 by quarter truly indicated the fact thatthe production began to drop rapidly in the IVth quarter that came after the Lehman shock in
September 2008.

14

1. Trend of the Machine Industry in Japan

Fig. 1.2.1

Production index of the machine industry in 2008 by quarter(seasonally adjusted; 2005=100)

Production index(seasonally adjusted)

145

135

125

115

105

95

85

Source:Ist quarter

IInd quarter

IIIrd quarter

IVth quarter

Machine industry (excluding
steel vessels and railway
vehicles)

117.5

115.3

109.7

92.9

General machines

107.9

104.3

99

88.9

Electric machines

103.5

102.1

101.5

94.1

Information andcommunication machines

112.9

107.5

101.6

92.3

Electronic parts and devices

137.9

137.5

127.2

102.9

Transportation machines(excluding steel vessels andrailway vehicles)

121.5

117.7

114

93.1

Precision machines

120.8

120

119.1

110.3

Same as that for Fig. 1.1.1.

(2) Trend of the shipment index in 2008 by quarter

Figure 1.2.2 shows the trend of the shipment index (seasonally adjusted; 2005=100) in 2008 byquarter of the machine industry and its main branch industries. As seen in this figure, the shipment
index of the whole machine industry (excluding steel vessels and railway vehicles) in 2008 remained
relatively good until the IIIrd quarter but decreased to 94.4 points in the IVth quarter, falling into adifficult situation just as for the production index. By main branch industry, the general machineindustry went below 100 points in the IIIrd quarter and then fell sharply to 87.2 points in the IVthquarter, the lowest level of the machine industry. The electric machine industry showed a relatively
gradual fall until the IIIrd quarter although in a downward trend, but decreased to 96.7 points in theIVth quarter. The information and communication machine industry showed a falling tendency but
registered 103.2 points even in the IVth quarter, which were higher than the level in the base year15

1. Trend of the Machine Industry in Japan2005. The electronic parts and device industry was on the decline but on a high level until the IIIrd
quarter but suddenly dropped to below 100 points in the IVth quarter. The transportation machineindustry (excluding steel vessels and railway vehicles) was on a relatively high level until the IIIrd
quarter but decreased to 95.4 points in the IVth quarter, which was the second lowest after thegeneral machine industry. Finally, the precision machine industry had the slowest falling trend of themain branch industries.

Fig. 1.2.2

Shipment index of the machine industry in 2008 by quarter(seasonally adjusted; 2005=100)

Shipment index(seasonally adjusted)

145

135

125

115

105

95

85

Ist quarter

IInd quarter

IIIrd quarter

IVth quarter

118.7

116.5

110.9

94.4

General machines

108

104.6

98.9

87.2

Electric machines

105.1

104.7

103.4

96.7

Information andcommunication machines

115.9

113.1

108.3

103.2

Electronic parts and devices

135.9

133.2

124.5

97.7

Transportation machines(excluding steel vessels andrailway vehicles)

123.6

120.4

115.3

95.4

Precision machines

122.4

121.1

118.1

109.1

Machine industry (excluding
steel vessels and railway
vehicles)

Source:Same as that for Fig. 1.1.1.

16

1. Trend of the Machine Industry in Japan

1.3. Situation of the capital investment of the machine industry(1) Situation of the capital investment of the general machine industry

Figure 1.3.1 shows the trend of capital investment of the general machine industry from the Ist
quarter of 2007 to the Ist quarter of 2009. As this figure indicates, the capital investment of thegeneral machine industry began to substantially decrease in the IInd quarter of 2007, and thistendency continued until the IVth quarter of that year. The fall was especially big in the IVth quarterof 2008. The trend of the increase rates (quarter-on-quarter) reached a peak in the IInd quarter of2007 and was then on the decline in general, decreasing to -20% in the IVth quarter of 2008 and theIst quarter of 2009. As noted, the capital investment of the general machine industry had a periodical
trend but started to show a considerable quarter-on-quarter decrease in the IVth quarter of 2008. It
can be seen from this fact that affected by the decreased production by the automobile industry(described later) due to the impact of the Lehman shock, capital investment in general machines,
including machine tools, began to be cut back rapidly.

Fig. 1.3.1

Situation of the capital investment of the general machine industry

Investment (¥100 million)
6,000
5,219

Increase rate (%)

Investment
投資額
Increase rate
増加率

50

5,582

44.1

4,000

40

4,722

5,000
26.2 3,994

4,260

4,250

4,187

3,943

20

3,254
12.5

3,000

10.8

10

6.9
-1.3

0.5

2,000

30

0
-10

1,000

-20

-23.4
-25

0
Ist Q 07

Note:
Source:IInd Q 07

IIIrd Q 07

IVth Q 07

Ist Q 08

IInd Q 08

IIIrd Q 08

IVth Q 08-30

Ist Q 09

Increase rate figures are those as compared with the same quarter of the previous year.
Based on the Ministry of Finance, “Statistical Survey of Incorporated Enterprises.”(2) Situation of the capital investment of the electric machine industry

Figure 1.3.2 shows the trend of capital investment of the electric machine industry from the Ist
quarter of 2007 to the Ist quarter of 2009. As seen in this figure, the capital investment of the electricmachine industry decreased greatly in the IVth quarter of 2007; the amount of investment dropped to¥346.0 billion and the increase rate (quarter-on-quarter) to -13.3%. Thereafter, the investment17

1. Trend of the Machine Industry in Japan

showed a recovering tendency in the Ist quarter of 2008 but suffered a great fall again in the Ist
quarter of 2009, with the increase rate (quarter-on-quarter) lowering to -36.4%.

Fig. 1.3.2

Situation of the capital investment of the electric machine industry

Investment (¥100 million)
7,000

Increase rate (%)

6,000
5,000

40

Investment
投資額
Increase rate
増加率

32.6

5,818

30

5,748

5,335

5,132

4,905

20

19.6

18.6
14.4
4,139

8.7 4,335

4,000

0.8

3,460

10
3,699
0

-3.8

3,000

-10

-13.3

2,000

-20

1,000

-30
-36.4

0
Ist Q 07

Note:
Source:IInd Q 07

IIIrd Q 07

IVth Q 07

Ist Q 08

IInd Q 08

IIIrd Q 08

IVth Q 08-40

Ist Q 09

Increase rate figures are those as compared with the same quarter of the previous year.
Same as that for Fig. 1.3.1.

(3) Situation of the capital investment of the information and communication machineindustry

As seen in Figure 1.3.3, the capital investment of the information and communication machineindustry continued to be in a very difficult situation. Although some recovery was shown in several
quarters, the investment went down to the ¥400.0 billion-yen mark in the IVth quarter of 2008, andthe increase rate (quarter-on-quarter) in the Ist quarter of 2009 decreased to -38.4%.

18

1. Trend of the Machine Industry in Japan

Fig. 1.3.3

Situation of the capital investment of the information andcommunication machine industry

Investment (¥100 million)

Increase rate (%)

9,000
8,000
7,000

6,191
3.3

6,000

30

Investment
投資額
Increase rate
増加率

7,933
19.5

20

7,439

10

6,015

5,618

5,574

5,206

-2.3
5,000

-7.3

-6.2
-12.7

4,000

0
4,582
4,205

-10

-15.9

-20

3,000

-25.1
-30

2,000

-38.4-40

1,000

-50

0
Ist Q 07

Note:
Source:IInd Q 07

IIIrd Q 07

IVth Q 07

Ist Q 08

IInd Q 08

IIIrd Q 08

IVth Q 08

Ist Q 09

Increase rate figures are those as compared with the same quarter of the previous year.
Same as that for Fig. 1.3.1.

(4) Situation of the capital investment of the transportation machine industry

As seen in Figure 1.3.4, the capital investment of the transportation machine industry has aperiodical character, such as an increase in the amount of investment in the Ist quarter of the year,
and this character affects the investment amount in general machines, which are industry goods.
Until the Ist quarter of 2008, the investment amount tended to move between ¥700.0 billion and¥1,000 billion but declined greatly in the IInd quarter of 2008, when the increase rate
(quarter-on-quarter) dropped sharply to -10.4%. A downward trend continued after that; in the Ist
quarter of 2009, the amount of investment reached almost ¥1,000 billion, but the increase rate fell to-18.9%, making rapid decreases in capital investment after the Lehman shock more evident.

19

1. Trend of the Machine Industry in Japan

Fig. 1.3.4

Situation of the capital investment of the transportation machine industry

Investment (¥100 million)

Increase rate (%)

14,00012,00011,715

13.1

10,6648.7

20

Investment
投資額
Increase rate
増加率

16.6

15

9.9

8,435

4.1
8,000

10

9,504

10,000
8,365

5

8,228

7,377

-2.4

6,607

7,208

0
-5

6,000

-10

-10.4

4,000

-13.8

2,000

-15
-18.9
-20

0

-25
Ist Q 07

Note:
Source:IInd Q 07

IIIrd Q 07

IVth Q 07

Ist Q 08

IInd Q 08

IIIrd Q 08

IVth Q 08

Ist Q 09

Increase rate figures are those as compared with the same quarter of the previous year.
Same as that for Fig. 1.3.1.

1.4. Situation of the export of the machine industry(1) Situation of the export of the entire machine industry

Figure 1.4.1 shows the trend of the amount and growth rate (year-on-year) of the export ofmachines and equipment (general machines, electric machines, transportation machines andprecision machines) from 2004 to 2008. As this figure indicates, the export of machines andequipment showed a decline of roughly ¥3,126.9 billion to ¥53,482.7 billion and the growth rate was-5.5%. The share of the export of machines and equipment was 20.9% for the top-ranking U.S.,
followed by China (13.4%) and South Korea (4.9%). As described above, the export amount ofmachines and equipment had grown favorably in the past five years but turned into a fall in 2008.
The impact of the rapidly deteriorating U.S. market, the largest importer, after the Lehman shock in
September 2008, can be quoted as a reason behind this. As a result, the export destinations ofmachines and equipment are expected to shift to China, the second largest importer, and Southeast
Asia with increasing speed in the future.

201. Trend of the Machine Industry in Japan

Fig. 1.4.1

Situation of the export of machines and equipment

Total export (¥100 million)

Growth rate (%)

600,000

20

Export amount
輸出金額

550,000

Growth rate
伸び率500,000

15

13.1

450,000

11.2

400,000

10

9.5

350,000
300,000

4.5

250,000
200,000

456,820

437,001

516,989

566,0965
534,8270

150,000-5.5

100,000-5

50,000
0

-10
2004

Note:
Source:

2005

2006

2007

2008

Growth rate figures are those as compared with the previous year.
Based on the Japan External Trade Organization (JETRO), “Trade Statistics Data Base.”(2) Situation of the export of general machines

As shown in Figure 1.4.2, the amount of export of general machines in 2008 was about ¥15,000
billion or a drop of ¥512.1 billion from the previous year, and the growth rate was -3.3%. By
importing country, the U.S. ranked top with 18.1%, accompanied by China (15.6%) and South Korea(7.2%).

Fig. 1.4.2

Situation of the export of general machines

Total export (¥100 million)

Growth rate (%)

180,000

35

Export amount
輸出金額
Growth rate
伸び率160,000

28.8

30

140,000

25

120,000

18.6

20

100,000
15
80,00012.5

60,000155,165

150,04410

120,457
99,79140,0007.3

5107,1140

20,000
-3.3

0
2004

Note:
Source:

2005

2006

Growth rate figures are those as compared with the previous year.
Same as that for Fig. 1.4.1.

21

2007

2008

-5

1. Trend of the Machine Industry in Japan(3) Situation of the export of electric machines

As Figure 1.4.3 shows, the amount of export of electric machines in 2008 decreased by¥1,570.0 billion, and the growth rate was -9.8%. The largest importer was China that accounted for
21.7% of the total export amount.
Fig. 1.4.3

Situation of the export of electric machines

Total export (¥100 million)

Growth rate (%)

175,000

15

Export amount
輸出金額
Growth rate
伸び率170,000

9.5

10

8.5

165,000
160,000

5

155,000

0.6
169,556

150,000
145,000
140,000

153,9180

161,016-5

154,793-5

145,316135,000-9.8

130,000

-15
2004

Note:
Source:

-10

2005

2006

2007

2008

Growth rate figures are those as compared with the previous year.
Same as that for Fig. 1.4.1.

(4) Situation of the export of transportation machines

Figure 1.4.4 shows that the amount of export of transportation machines in 2008 was ¥20,288.6
billion or a growth rate of -3.6%. The largest export destination was the U.S. (27.6%).
Fig. 1.4.4

Situation of the export of transportation machines

Total export (¥100 million)
240,000
220,000
200,000
180,000
160,000
140,000
120,000
100,000
80,00060,00040,00020,000025

Exportamount
輸出金額
Growth
伸び率 rate

19.7

20
15

14
6.6
142,8098
154,241

184,640

210,51510
202,886
5
0
-3.6
-5

2004

Note:
Source:Growth rate (%)

2005

2006

Growth rate figures are those as compared with the previous year.
Same as that for Fig. 1.4.1.

22

2007

2008

1. Trend of the Machine Industry in Japan(5) Situation of the export of precision machines

As shown in Figure 1.4.5, the amount of export of precision machines in 2008 was ¥3,658.1
billion or a fall of ¥282.0 billion year on year. The growth rate was -7.2%, lower than in the previous
year. By importing country, China took first place (19.5%), followed by the U.S. (19.2%) and South
Korea (8.8%).

Fig. 1.4.5

Situation of the export of precision machines

Total export (¥100 million)

Growth rate (%)

50,00025
22.6

Export amount
輸出金額
Growth rate
伸び率

20
15
10

40,0005

4.1
40,4830.5

42,335039,401

40,672-6.9

36,581

30,000

-10
2004

Note:
Source:

-5
-7.2

2005

2006

2007

2008

Growth rate figures are those as compared with the previous year.
Same as that for Fig. 1.4.1.

1.5. Situation of the import of the machine industry(1) Situation of the import of the entire machine industry

Figure 1.5.1 shows the amount and growth rate (year-on-year) of the import of machines andequipment (general machines, electric machines, transportation machines and precision machines)
from 2004 to 2008. As seen in this figure, the import of machines and equipment had favorablyincreased in 2003 and after but dropped by about ¥1,500.0 billion to ¥18,757.2 billion or a growthrate of -7.4% in 2008, suddenly increasing a falling tendency. The factor contributing to thissituation is probably the fact that owing to a rapid deterioration of the world economy affected by
the Lehman shock in September 2008, Japanese machine industries put the brakes on theirprocurement of machine parts and the like from abroad as a result of changes in capital investment
plans and reduction in production. In the import of machines and equipment in 2008, the importfrom China accounted for 33.3%, making the country the largest exporter and a third of the machineand equipment import by Japanese businesses one from China. The U.S. (17.6%) gained second
place and South Korea (7.6%), third place. As noted, due to the reduced production of automobiles
for the U.S. market and the declining investment intentions of Japanese machine industries, adownward trend in the import amount of machines and equipment will continue for some time in the23

1. Trend of the Machine Industry in Japan

years to come. Moreover, machine industries in Japan are beginning to shift their export to China
and Southeast Asia and will enter a reconstruction stage of a global supply chain within China, Japanand Southeast Asia.

Fig. 1.5.1

Situation of the import of machines and equipment

Total import (¥100 million)

Growth rate (%)

250,000

20

Import amount
輸入金額
200,000

Growth rate
伸び率

15

14.2

10.1

10

9.3

150,000

5.3
100,000
154,153

168,472

192,363

202,5635
187,572050,000

-5
-7.4
-10

0
2004

Note:
Source:

2005

2006

2007

2008

Growth rate figures are those as compared with the previous year.
Same as that for Fig. 1.4.1.

(2) Situation of the import of general machines

As shown in Figure 1.5.2, the amount of import of general machines in 2008 was ¥4,066.7
billion or a growth rate of -5.8%. By exporting country, China (30.2%) took first place, accompaniedby the U.S. (22.7%) and Germany (8.2%).

24

1. Trend of the Machine Industry in Japan

Fig. 1.5.2

Situation of the import of general machines

Total import (¥100 million)

Growth rate (%)

50,00035

Import amount
輸入金額
Growth rate
伸び率

31.3

30

40,000

25
21.8

20

16.8

30,00015

14.6
43,18520,00010

40,667

5

32,887
10,00027,00323,562

0
-5.8

-10

0
2004

Note:
Source:

-5

2005

2006

2007

2008

Growth rate figures are those as compared with the previous year.
Same as that for Fig. 1.4.1.

(3) Situation of the import of electric machines

As seen from Figure 1.5.3, the amount of import of electric machines in 2008 was a little
smaller than ¥9,860.0 billion (growth rate: -7.4%). China had a much higher share of 43.1% of thetotal import.

Fig. 1.5.3

Situation of the import of electric machines

Total import (¥100 million)

Growth rate (%)
Import amount
輸入金額
Growth rate
伸び率110,000

15
11.36

10.01

90,00010

7.45
70,00050,0005

89,57596,257

107,194

106,442

98,5740-0.7

30,000-5-7.4

10,000

-10
2004

Note:
Source:

2005

2006

Growth rate figures are those as compared with the previous year.
Same as that for Fig. 1.4.1.

25

2007

2008

1. Trend of the Machine Industry in Japan(4) Situation of the import of transportation machines

Figure 1.5.4 shows that the amount of import of transportation machines in 2008 was ¥2,345.2
billion, a sharp decrease of -8.4%. The U.S. (30.0%) had the largest share, followed by Germany(20.9%) and China (12.9%).

Fig. 1.5.4

Situation of the import of transportation machines

Total import (¥100 million)

Growth rate (%)

30,00015

Import amount
輸入金額
Growth rate
伸び率25,000

11.8
9.1

10

7.5
20,0005
3

15,00010,00019,51520,98422,897

25,610023,452

-5

5,000
-8.4

0
2004

Note:
Source:

2005

2006

2007

-10

2008

Growth rate figures are those as compared with the previous year.
Same as that for Fig. 1.4.1.

(5) Situation of the import of precision machines

Figure 1.5.5 shows that the amount of import of precision machines in 2008 was ¥2,487.8
billion (growth rate: -9.0%), which was a fall larger than that in 2007. The U.S. ranked first in theshare of Japan’s import, accompanied by China (18.8%) and Switzerland (8.9%).

26

1. Trend of the Machine Industry in Japan

Fig. 1.5.5

Situation of import of precision machines

Total import (¥100 million)

Growth rate (%)

35,00025

Import amount
輸入金額
Growth rate
伸び率30,000

21.28

20

12.68
25,000

15

10.71
10

20,0005
15,00010,00029,38421,501

24,22727,325

-5
-7

5,000

-9

0

-10
-15

2004

Note:
Source:024,8782005

2006

Growth rate figures are those as compared with the previous year.
Same as that for Fig. 1.4.1.

27

2007

2008