However, activities are recently slightly improving, as effects of various policy measures, among other things, have spread through the economy. As for fiscal policies in the near future, the Government will take, if necessary in view of the development of the Japanese economy among other things, flexible and timely measures including the use of public works contingency budget and the provision of the second supplementary FY1999 budget based on the idea of a 15-month budget. The Japanese economy, in terms of demand, shows that personal consumption is gradually recovering, though not strongly as income remains sluggish. Housing construction has recovered. Investment in plant and equipment keeps decreasing substantially as a trend.
Public works are bullish as a whole.
In such a situation, industrial production has proceeded nearly sideways at a low level, which reflects the moves of final demand, but signs of recovery are seen. Corporate profits are also showing signs of recovering. 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. Severity increases in the employment situation.