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JAPANESE CONSUMERS WORSE OFF.

After more than 20 consecutive months of declining real wages, Japanese consumers find themselves considerably worse off than they were in 2001. The average household is likely to keep high-end purchases on hold until consumer confidence bounces back from depressed levels registered so far this year.

One of the worst enemies of consumer confidence this year is unemployment. The jobless rate should gradually rise from 5.5 toward 6 percent during the latter half of 2003 and that bodes ill for sales of automobiles and major household appliances. No significant year-on-year gains in sales of high-end durables are likely to emerge until the fourth quarter when modest growth of from 1 to 3 percent will be noted.

The weak residential real estate market will put downward pressure on demand for goods and services associated with construction of new units. Orders for construction equipment and building materials should show year-on-year losses of 1 to 3 percent through most of the remainder of this year. The construction sector is being hurt by low demand in both the residential and industrial sectors. Industrial plant expansion projects are not likely to be dusted off until well into 2004 but an increasing percentage of production capacity will shift to China over the next couple of years.
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Publication:Market Asia Pacific
Article Type:Brief Article
Geographic Code:9JAPA
Date:Jul 1, 2003
Words:211
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