Personal consumption remains broadly flat while the decrease in income is coming to an end. The level of housing investment is stable as a whole, though condominium construction, which had been buoyant in recent months, declined. Investment in plant and equipment continues its upward trend, with investment plans in manufacturing revised upwards. The level of public works is lower than the level seen a year ago. Exports, especially those to Asia, have been rising modestly, despite a slowdown in exports to the United States and Europe.
Industrial production continues to rise steadily.
Although the employment situation remains severe with the unemployment ratio staying at a high level, there have been improvements such as continued increase in overtime hours worked and in job offers. Corporate profits continue to improve markedly. Corporate confidence has further improved as a whole, although it remains at a low level in some sectors. On the other hand, the number of business failures has been somewhat high, with gross debt of failed firms rising. The main thrust of economic and fiscal policy of the Japanese Government has been to sustain domestic economy so as to establish an autonomous recovery path, and to make bold reforms of economic structure for the 21 st century.