The Fasteners Institute of Japan (FIJ) Managing Director, Mr. Oiso Yoshikazu
Introduction
As the non-transparency in the world economy results in restrained equipment investment, the current Japanese fastener industry is affected by fastenerdemanding industries (car, construction, machinery, etc.) and is in the middle of a difficult situation. This article states the prospect of the Japanese fastener industry for the year 2016 based on such economic background.
Fastener Production/Import/Export in 2015
2015 did not reap good results for the Japanese fastener industry. As illustrated in Figure 1, the fastener production in comparison to the previous year decreased 1.6% to 2.89 million tons, and the value decreased 1.1% to JPY 834.8 billion. As in Figure 2, the export volume decreased 4.2% to 315 thousand tons, and the value decreased 0.3% to JPY 276.4 billion. These figures reflect the trend of fastener consumers, and therefore it is foreseeable that the future condition does not look optimistic. On the other hand, in terms of exports, Figure 3 shows that the volume decreased 6.2% year on year to 234 thousand tons; however, the value increased 2.8% to JPY 92.1 billion. In my opinion this phenomenon is greatly affected by the exchange rate of depreciated yens and is the consequence of price raise.
The Fastener Industry Prospect for 2016
In a brief look at the production trend of Japanese fastener industry within the first 6 months of 2016, the production volume was 1.45 million tons and the value was JPY 422.5 billion (both the figures are the predictive values of FIJ). As these two figures are flat with the performance of the previous period, we predict that the full year performance of 2016 will remain flat with the previous year which tended to decrease in performance. Note that this prediction is on condition that the performance of car production is flat with the previous year.
To look at the import and export condition shown in the half-year trading statistics released by the Ministry of Finance, the export volume was 160 thousand tons, the export value was JPY 140 billion, the import volume was 120 thousand tons, and the import value was JPY 45.4 billion. To compare these figures with the previous period, the export volume increased 1.8%, the export value decreased 4.2%, the import volume decreased 1.4%, and the import value decreased 11.7%. If we make a full year estimation with these figures, the export is the same level or a slight drop from the previous year, and the import slightly decreases.
Whichever the case it is, at this stage the full year prediction for fastener production/import/export still involves uncertainty because it is largely subject to the change of exchange rate caused by the volatile world economy.
The Trend of Fastener Consumers
The trend of consumers that affect the trend of the fastener industry is as follows:
If we look at the change of car production volume within the first 6 months of 2016 in Figure 4, the volume tended to decrease compared with the previous month. Although housing starts tended to increase compared with the previous months, the housing starts showed drastic decrease in June. The total production of electric and electronics machinery in the first 6 months of 2016 was JPY 9,057.7 billion which is 91.4% to the previous period. The machine tool order value in July was JPY 104.3 billion which is 80.3% to the previous period, and the total order value in the first 6 months of 2016 was JPY 735.4 billion which is 78.3% to the previous period. These percentages indicate a severe industry condition.
Those reasons that caused the stagnant demand industry reflect the stagnation of the world economy, and they still indicate the continuation of economic recession.
Wrapping up
Although the fastener industry is subject to the trend of world economy, it is still important to provide fasteners with long developed credibility at appropriate prices even in recessive economy. With the negative impact on production activities as a result of the big earthquake in Kumamoto Prefecture (Japan) in April 2016. the mixed up prospect for the Japanese economy will continue to remain for a while in the future. On the other hand, for a brighter example, we are optimistic for the positive cycle in the Japanese economy going for Tokyo Olympics 2020.
