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[After Corona] SMBC's economic report is wonderful, so please explain it.
Roughly speaking
- Mitsui Sumitomo Bank's macroeconomic reports are excellent every time.
- Inbound consumption and unemployed people are in a pinch. Other than the US and Japan, the economy is likely to be slow to recover overseas.
- Let's take a rough look at the industry situation using an industrial weather map.
Macroeconomic Report
Regarding COVID-19, I made a mysterious prophecy.
Coronavirus Let's predict the after-coronavirus. Gonjicchi Dams' Great Prophecy
In particular, Prophecy 2: The irreversible changes in industrial structure are gradually becoming exactly as prophesied.
To be honest, the economic recession occurs at a level that may occur once every 100 years, so I also looked into history to see if there was anything useful to me, but I couldn't find it. The current situation is simply to keep in mind what we know now and explore and predict what we are moving forward in the world.
Mitsui Sumitomo Bank issues an excellent economic report to investors once every six months. It was created by the Japan Research Institute and is sufficient to understand the current economic situation around the world. This time I would like to briefly introduce it.
After-COVID report summary
For more information, please take a look at the actual materials, but I will pick out some interesting content that is personally interesting.
End of inbound consumption (exports of goods continue, but still down)
Looking at the bottom right of the top diagram, it can be seen that inbound consumption, which had achieved solid growth, has almost completely destroyed. In April, the company fell 99.9% from the previous year.
What we should pay attention to here is that while exports of goods are expected to recover from a 30% decline, service exports are almost zero. The basic content of the economy is that the tertiary industry (service industry) is the first thing that falls in the course of an economic recession. This includes the fact that the service industry involves the movement of people, and that services themselves are not essential for sustaining life.
Unemployment rate and sudden decline in employers
It is difficult to tell how many times the impact the Lehman shock actually has been, unless you use a logarithmic graph, but the number of employees has been declining sharply, especially in non-regular employment. Without corporate employment retention, the unemployment rate would be over 10%, but in reality it could be said that the unemployment rate would be even worse than the impression it had. For some reason.
First of all, the employment and storage of companies itself is beginning to collapse towards the end of the year. The timing of the collapse of employment storage can be predicted by looking at the company's internal reserves and capital ratios, but as you can imagine the situation from September onwards, when consumption is set to a halt due to seasonal fluctuations, it will continue to deteriorate from the end of the year until August next year (when vaccines are expected to start circulating in the market).
Second, the unemployment rate does not count for those who have given up on job hunting. In other words, in reality, more than a percentage of people suffer from hard work.
Third, an increase in the number of employees leaving the company (bottom right of the above diagram) is having a negative impact on the economy. It's easy to understand if you imagine the food and beverage districts of Shinbashi and Shinjuku, but as the number of employees who have no time off increases, consumption will drop even if they have jobs. Furthermore, as the consumption region is biased, only locally-independent industries such as online continue to be profitable.
Economic recovery is slow outside the US and Japan
The US and Japan are actually able to save many small and medium-sized enterprises by carrying out large-scale fiscal stimuli. The above diagram shows the US, but the corporate loan balance in the top left of the above diagram shows record growth.
In Japan, economic measures are also possible with the two supplementary budgets, but there are still questions regarding effective use. GoTo Travel is a consumption stimulus measure that can be leveraged more than the original funds, but it has not been effective at all because the government's attitude is vague whether they want it to be actively used or not.
Incidentally, emerging countries, Europe and developing countries are serious. In Europe, central banks are unable to implement effective economic measures due to the EU's debate system. Emerging and developing countries are in the first place, their own currency is too weak to make fiscal stimuli. The only countries in the world are able to implement economic measures in the United States and Japan, and the UK, to name a few.
Industrial Weather Map
Next, reports for each industry will be continued, but there is no time to give details, so I will introduce the industrial weather map.
While overall it's getting worse, some industries are improving.
What may be surprising is real estate. While real estate has strict offices in the city center, demand is growing in the area around urban areas. Overall demand cannot be said to be declining. In addition, demand for tower buildings, which became a problem due to heavy rains last year, is on the rise, with many apartments almost fully booked.
Aside (Today's Recommended Book)
This section introduces books that are not worth writing about but would like to introduce. This time, here.
It's difficult to talk about macroeconomics, so first let's understand what is affecting what. Tabuchi's book is the easiest to understand. I especially love the following books:
