Firms' confidence is on an improving trend, although at a low level. All in all, the economy is in a severe situation, as private demand shows little momentum of recovery. However, activities are recently slightly improving, as effects of various policy measures have spread through the economy. The Japanese economy, in terms of demand, shows that personal consumption is gradually recovering, though not strongly as income remains sluggish. Housing construction has come to recover.
Public works are bullish.
In such a situation, industrial production is broadly stable, though at a low level, reflecting above final demand conditions. Signs of improvement are seen in corporate profits. And enterprises' judgment on business conditions, though still in a severe situation, is towards improvement. The number of bankruptcy, which has increased in a degree since early spring, stands, however, at a level substantially lower than a year ago, due mainly to the expansion of the Credit Guarantee. The employment situation remains severe.