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ECONOMIC OVERVIEW OF TOHOKU REGION 2018

Tohoku Bureau of Economy, Trade and Industry Contents

1. Overview of the Tohoku Region (1) Overview of the Tohoku Region………………………………………………… 2 (2) Positioning of Tohoku as Shown in Major Economic Indicators………………… 3

2. Economic Structure and Trends in the Tohoku Region (1) Gross Product…………………………………………………………………… 4 (2) Real Economic Growth Rate…………………………………………………… 5 (3) Population………………………………………………………………………… 6 (4) Demographics…………………………………………………………………… 7 (5) The Number of Business Establishments (Private)……………………………… 8 (6) Industrial Production…………………………………………………………… 10 (7) Consumption……………………………………………………………………… 12 (8) Private Sector Capital Expenditures……………………………………………… 13 (9) Acquisition of Plant Locations…………………………………………………… 15 (10) Labor Force Population………………………………………………………… 16 (11) Employment…………………………………………………………………… 17 (12) Business Entry and Exit Rates………………………………………………… 18 (13) Internationalization ① Trade………………………………………………………………………… 19 ② Internationalization of Corporate Activities………………………………… 21 ③ International Arrivals/ Departures and Foreign Residents………………… 22 (14) Tourism ① Domestic Tourism…………………………………………………………… 23 ② Foreign Tourism…………………………………………………………… 24 (15) Reconstruction Related Trends………………………………………………… 25

3. Industrial Structure of Tohoku (1) Manufacturing industry ① Overview…………………………………………………………………… 27 ② National Share by Industry Sector…………………………………………… 28 ③ Percentage Ratios by Industry Sector by Prefecture………………………… 29 ④ Shipment Value of Manufactured Goods in Major Industrial Sectors and Added Value Productivity by Region…………………………………… 30 ⑤ Industrial Property Rights…………………………………………………… 31 (2) Commerce ① Overview…………………………………………………………………… 32 (3) Service industry………………………………………………………………… 33 (4) Agriculture, Forestry, and Fisheries……………………………………………… 34

Note: Due to rounding up/ off, not all totals equal the sum of separate figures in tables and graphs throughout this document.

_ 1 _ 1. Overview of the Tohoku Region (1) Overview of the Tohoku Region Gross Regional Domestic Product (GRDP) (6.2% of national total)

Aomori 13.4% 23.1% Iwate 33,889.4 13.9% billion yen Yamagata 11.7% (FY 2015) Miyagi 9.9% 28.0%

Value of Manufactured Goods Shipped (5.6% of national total)

Aomori 10.6% Fukushima 28.4% Iwate 17,185 13.9% Akita billion yen (FY 2016) Total Area Yamagata Miyagi Iwate 15.7% 24.2% (17.7% of national total) Akita 7.3% Aomori Fukushima 14.4% 20.6%

2 Wholesale Annual Sales Value 66,947km Iwate Yamagata (FY 2017) 22.8% (4.3% of national total) 13.9% Aomori Fukushima 10.5% Akita Miyagi 14.4% 17.4% 10.9% Yamagata Iwate 11.2% 7.6% 17,570.5 Akita billion yen Yamagata 6.4% Miyagi (FY 2015) Total Population (7.0% of national total) Miyagi 50.0% Aomori Fukushima 14.5% 21.3% 8,836,000 Iwate Retail Annual Sales Value 14.2% Yamagata people (7.2% of national total) 12.5% (FY 2017)

Akita Miyagi Aomori 11.3% 26.3% Fukushima 14.4% 21.2% Fukushima 9,966.6 Iwate 13.7% Yamagata billion yen 11.6% (FY 2015) Akita 11.3% Miyagi 27.8%

Economic Indicators for the Tohoku Region Item Item Major economic indicators Tohoku Data and source Major economic indicators Tohoku Data and source Income per capita Total area < km2 > National Land Area Survey of FY 2015 Annual Report on 66,947 <1,000 yen> 2,765  (As of October 1, 2017) Prefectures and Municipalities Prefectural Accounts (Geospatial Information Authority of )  (FY 2015) (Cabinet Office)

Total population <1,000 people> Population Estimate No. of establishments 8,836 (Ministry of Internal Affairs and 414,657 2016 Economic Census for  (As of October 1, 2017)  (As of June 1, 2016) Communications) Business Activity (Ministry of Internal Affairs and No. of households 2015 Population Census No. of employees Communications and Ministry of 3,468 (Ministry of Internal Affairs and 3,726  (As of October 1, 2015)  (As of June 1, 2016) Economy, Trade and Industry) Communications) Value of manufactured Nominal GRDP <100 million yen> 2017 Census of Manufacture 338,894 goods shipped <100 million yen> 170,185 (Ministry of Economy, Trade and  (FY 2015) FY 2015 Annual Report on Prefectural Accounts  (FY 2016) Industry) (Primary industry) 8,301 (Cabinet Office, Prefectural Public Wholesale sales value (Secondary industry) 96,034 Documents) 175,705 2016 Economic Census for <100 million yen> (FY 2015) (Tertiary industry) 233,860 Business Activity (Ministry of Internal Affairs and 77cities Retail sales value <100 million No. of municipalities Number of Municipalities in Communications and Ministry of 116towns (Ministry of Inter- yen> 99,666  (As of August 1, 2018) Each Prefecture Economy, Trade and Industry) 34villages nal Affairs and Communications)  (FY 2015) < Note 1> For the areas of prefectures with undefined boundaries, reference values recorded in the National Land Area Survey of Prefectures and Municipalities (Geospatial Information Authority of Japan) are used. < Note 2> Figures by industry are before the deducation or addition of import duties, imputed interest, etc. on imported goods. < Note 3> Privately operated offices _ 2 _ _ 3 _ (2) Positioning of Tohoku as Shown in Major Economic Indicators

Although Tohoku’s population accounts for 7.0% of Japan’s population, Tohoku is below the na- tional level from the perspective of “GRDP” and “value of manufactured goods shipped.” In the manufacturing industry, Tohoku’s position is higher for “electronic parts, devices and electronic circuits” and “information and communications electronics equipment.”

(%) 0.0 5.0 10.0 15.0 20.0

Total area [2017] 17.7

Total population [2017] 7.0

No. of employed persons [2017] 6.9

(Primary industry) 14.9

(Secondary industry) 7.4

(Teritary industry) 6.4

GRDP [FY 2015] 6.2

(Primary industry) 15.2

(Secondary industry) 6.5

(Teritary industry) 6.0

No. of business establishments [2016] 7.4

No. of employees [2016] 6.6

Value of manufactured goods shipped [2016] 5.6

(Foodstuffs) 7.2

(Electronic parts, devices and electronic circuits) 15.6

(Transportation equimpment) 2.6

(Information and communications electronics equipment) 14.8

Wholesale sales value [2015] 4.3 Percentage of the total population: 7.0%

Retail sales value [2015] 7.2

Department store/ supermarket sales value [2017] 6.3

(Department stores) 3.2

(Supermarkets) 7.8

Convenience store sales value [2017] 6.9

New passenger car registrations [FY 2017] 7.7

Housing starts [FY 2017] 6.3

Value of public works contracted [FY 2017] 16.0

No. of factory locations acquired [2017] 9.4

(Note) The number of employed persons is based on the Labor Force Survey 2017, preliminary report (Ministry of Internal Affairs and Communications). _ 3 _ 2. Economic Structure and Trends in the Tohoku Region (1) Gross Product

The Gross Regional Domestic Product (GRDP) is 33.9 trillion yen, or 6.35% of the national total.

●In fiscal year 2015, the Tohoku region’s nominal GRDP was 33,889.4 billion yen, up 2.2% from the previous year, and 6.35% of the national total. The GRDP increased in the prefecture of Aomori, Iwate, Miyagi and Yamagata.

(Trillion yen) Changes in Nominal GRDP (%) 50 6.50 6.37 6.39 6.35 Aomori 6.32 6.11 Iwate Miyagi 40 32.3 33.2 33.9 6.10 30.5 6.04 31.3 Akita 29.8 trillion yen trillion yen trillion yen trillion yen trillion yen Yamagata trillion yen 4.4 4.5 30 4.4 4.4 4.3 5.70 Fukushima 4.4 4.6 4.7 4.0 4.3 4.5 National Total 4.1 (right axis) 20 9.5 5.30 7.9 7.8 8.5 8.8 9.2 3.3 3.3 3.4 3.7 3.3 3.3 4.90 10 3.7 3.7 3.7 3.9 3.8 4.0 7.2 6.6 7.0 7.5 7.8 7.8 0 4.50 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 (Note) The past figures in the Annual Report on Prefectural Accounts are revised retrospectively, together with the estimates for the latest fiscal year. (Note) Calculated nationwide figures when calculating the national ratio based on the National Accounts Calculation Source: Annual Report on Prefectural Accounts, Cabinet Office

●In fiscal year 2015, the Tohoku region’s nominal GRDP follows behind that of Kanto, Kinki, Chubu and Kyushu re- gions. (Trillion yen) Nominal GRDP by Region 300 Hokkaido 249.4 Tohoku Aomori, Iwate, Miyagi, Akita, Yamagata, Fukushima, Fukushima Ibaraki, Tochigi, Gunma, , , , Kanto 250 Kanagawa, , Yamanashi, , Chubu , Ishikawa, , Aichi, Mie Kinki , Shiga, , , Hyogo, , 200 Chugoku , Shimane, , , , Kagawa, Ehime, Kochi知 Kyusyu , , , , Oita, 150 Okinawa Okinawa

100 86.4 64.6 45.0 50 33.9 29.9 19.0 14.2 4.1 0 Hokkaido Tohoku Kanto Chubu Kinki Chugoku Shikoku Kyusyu Okinawa

Source: Annual Report on Prefectural Accounts, Cabinet Office

●By industry classification, primary industries account for 2.5%, secondary industries for 28.4%, and tertiary industries for 69.1%. Share of the construction industry rose to 10.5% due to reconstruction-related projects in the aftermath of the Great East Japan Earthquake of 2011, which is 4.6 points increased, comparing with the share in 2010, before the earthquake.

Changes in the Share of Industry Sectors in Nominal GRDP 0 10 20 30 40 50 60 70 80 90 100 (%) 0.1 FY2010 2.6 18.8 5.9 4.5 11.4 3.9 12.3 4.6 3.2 2.5 5.9 7.0 4.9 8.7 4.6 30,492.8 billion yen

0.2 FY2015 2.5 17.8 10.5 3.7 10.8 3.6 10.9 4.8 2.8 2.4 6.1 6.9 4.3 8.6 4.2 33,889.4 billion yen Mining

Education Wholesale and retail ) Real estate Manufacturing Finance and insurance Agriculture, Forestry and Fisheries Construction Transport and Transport postal services Electricity, gas, Electricity, water and waste disposal business Miscellanceous services

Primary Information and communications Government service producers Professional, technical and business support services

Secondary industry Tertiary industry Accommodations, eating and drinking services industry Public health and hygiene and social services (Medical, health care and welfare

(Note) The above shares are before the addition and deduction of duties, customs and so forth on imported goods. Source: Annual Report on Prefectural Accounts, Cabinet Office _ 4 _ _ 5 _ (2) Real Economic Growth Rate

The real economic growth rate was 0.6%, showing a positive growth for four consecutive years.

●The economic growth rate of Tohoku region in fiscal year 2015 was 0.6% (cf. 1.4% for Japan), continuing the trend of positive growth for four consecutive years, which was lower than that of Japan.

Changes in the Real Economic Growth Rate in the Tohoku Region (chain-linking method)

(%) Peak: February 2008 Trough: March 2009 Peak: March 2012 Trough: November 2012 6.0 5.1 5.0 Japan Tohoku 3.5 4.0 3.2 3.0 1.6 1.5 1.5 2.0 1.4 1.2 1.3 2.6 1.4 1.2 0.5 0.8 0.7 1.0 -0.4 0.0 0.6 -0.7 -0.3 -1.0 -1.8 -1.8 -2.0 -3.4 -2.2 Great East Japan Earthquake -3.0 -4.0 Lehman Shock -5.0 -5.5 -6.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019(FY) (Note 1) The figures for Japan are based on National Accounts of Japan in 2016 (2008SNA (System of National Accounts)). (Note 2) Japan’s figures for fiscal year 2017, 2018 and 2019 are taken from the Mid-Year Economic Projection for FY 2017 released by the Cabinet Office on July 6, 2018. (Note 3) The figures for Tohoku are based on 2011SNA (System of National Accounts) and the chain-linking method (chain-linking price to the calendar year 2011). (Note 4) The figures for Tohoku from FY 2016 onward are not included because the six Tohoku prefectures have not yet released them. (Note 5) Business-cycle peaks and troughs are based on the Cabinet Office’s reference dates for the business cycle. Source: Annual Report on National Accounts of Japan, and Annual Report on Prefectural Accounts, Cabinet Office

●With respect to the contribution made by different economic activities (industrial sectors) to the real economic growth rate for fiscal year 2015, finance/ insurance industry and health sanitation/ social business and specialized/ science technology/ business support service industry and wholesale/ retail made positive contributions of 0.3% and 0.2% re- spectively, while electricity, gas, water, waste disposal had a negative impact of minus 0.2%. ●In terms of changes in the real economic growth rate of each prefecture in Tohoku, Aomori, Miyagi and Yamagata recorded positive growth, while Akita and Fukushima recorded negative growth. The prefecture of Aomori and Ya- magata whose rate of growth was minus turned to plus, comparing with fiscal year 2014.

Contribution to the Real Economic Growth Rate Changes in Real Economic Growth Rate in FY 2015 by Economic Activity by Prefecture (%) (%) (Chain-linking method) (Chain-linking method) 0.5 12.0 10.0 0.3 0.3 8.0 0.2 0.2 0.1 6.0 0.1 0.1 0.1 0.0 0.0 4.0 Aomori 2.7 0.0 0.0 0.0 2.0 Miyagi 1.8 -0.0 -0.0 Yamagata 1.3 0.0 -0.1 -0.2 Iwate 0.0 -2.0 Akita -1.0 -4.0 Fukushima -1.2 -6.0 -0.5 -8.0 21 22 23 24 25 26 2015(FY)

Mining Aomori Iwate Miyagi Akita Yamagata Fukushima Real estate Education Construction Manufacturing Wholesale and retail Finance and insurance waste disposal business Miscellanceous services Electricity, gas, water and Electricity, (Medical, health care and welfare) Transport and postal services Transport Information and communications Government service producers Agriculture, Forestry and Fisheries Public health and hygiene social services Professional, technical and business support services Accommodations, eating and drinking services Source: Annual Report on Prefectural Accounts, Cabinet Office _ 5 _ (3) Population

The productive-age population in Tohoku is projected to shrink by 35.1% between 2017 and 2040.

●In 2017, the Tohoku region had a population of 8.84 million, accounting for 7.0% of the national population (126.71 million people). Tohoku’s population started to decrease after peaking in 1995, and is projected to drop 23.8% be- tween 2017 and 2040 to 6.73 million, or 6.1% of the national population.

(10,000 people) Changes in the Population of the Tohoku Region (%) 1,200 12

10.4 Share of the national total 1,000 973 983 982 963 10 933 911 923 934 898 884 861 9.2 Aomori Iwate 1.28 million 772 8 800 8.2 8.0 7.8 1.26 million 7.7 673 7.5 7.3 7.1 7.0 6.9 600 6.5 6 Miyagi 6.1 2.32 million

400 4 Akita 1.00 million Yamagata 1.10 million 200 2

Fukushima 1.88 million

0 0 1955 1965 1975 1985 1995 2000 2005 2010 2015 2017 2020 2030 2040

(Note)The above estimates are based on medium assumptions of births and deaths. Source: (1955 to 2015) Population Census of Japan, the Statistics Bureau of the Ministry of Internal Affairs and Communications (2017) The Ministry of Internal Affairs and Communications Population estimate (From 2020 onward) Population Projection by Prefecture, the National Institute of Population and Social Security Research (Projection from March 2018)

●In terms of population changes in three age groups between 2017 and 2040, the productive-age population (15 to 64 year-olds) and the child population (0 to 14 year-olds) are projected to decrease by 1.79 million and 390,000 respec- tively, while the aged population (aged 65 or older) is projected to increase by 800,000. The decrease in population along with the aging of the population is advancing ahead of the national average.

Population Trends of Three Age Groups Changes in the Population and (10,000 people) (1955 = 100, index) the Population Aging Rate (%) 1,200 160.0 80.0 Child population Japan 140.7 Productive-age population 140.0 70.0 1,000 Aged population 166 148 133 Population 120 120.0 60.0 106 102 96 100.0 800 Tohoku 94.7 78 100.0 50.0 63 600 80.0 40.0 634 606 571 523 511 484 Tohoku 30.7 648 408 331 60.0 30.0 400 Population aging rate Japan 27.7 40.0 (right axis) 20.0 200 Japan 5.3 281 286 279 20.0 Tohoku 4.6 10.0 223 238 260 272 169 200 0 0.0 0.0 1995 2000 2005 2010 2015 2017 2020 2040 2050 1955 1965 1975 1985 1995 2005 2015 2017 2025 (Note) From 2017 onward, unknown age has been apportioned by proportional division. Source: (1995 to 2017)Population Census of Japan, the Statistics Bureau of the Ministry of Internal Affairs and Communications (2017)The Ministry of Internal Affairs and Communications Population estimate (From 2020 onward) Population Projection by Prefecture, the National Institute of Population and Social Security Research (Projection from March 2018)

_ 6 _ _ 7 _ (4) Demographics

Tohoku’s population shrank by 55,000 due to natural population decline, and by 28,000 due to net migration loss.

●In 2017, the number of live births in Tohoku region was 58,700 down 2,500 from the previous year, while there were 114,200 deaths, up 1,900 from the previous year. As a result, natural population decline increased from 51,000 people in the previous year to 55,500 people. ●In 2017, 78,700 people moved to Tohoku region, down 3,300 people from the previous year, and 107,000 people moved out of the region, down 400 people from the previous year. As a result, Tohoku’s net migration loss (arrivals minus departures) increased from 24,600 people in 2016 to 28,300 people. ●Among the 155,900 people who moved out of one of the six prefectures in the Tohoku region, 48,900 people moved into another prefecture in the region, while 107,000 people moved out of the region entirely, showing that about 70% of the people moved out of the region altogether. The destination of the largest portion of people moving within the Tohoku region was .

Changes in the Number (1,000 people) of Live Births and Deaths (1,000 people) Changes in Arrivals and Departures 140 140 122.0 124.1 114.2 120 109.8 110.7 112.3 120 108.5 109.3 104.8 104.2 107.5 106.6 107.0 96.6 100 100 92.0 87.7 86.4 86.8 85.7 85.3 82.1 75.0 78.7 80 70.0 80 64.2 63.3 61.3 58.7 60 60 40 40 20 20 0 0 2000 2005 2010 2014 2015 2016 2017 2000 2005 2010 2014 2015 2016 2017

Number of live births Number of death Number of arrivals Number of departures

(Note)The datum in 2017 are approximate value. (Note) The number of arrivals/ departures does not include people Source: Annual Report on Demographic Statistics, who moved within the Tohoku region. Ministry of Health, Labour and Welfare Source: Annual Report on the Internal Migration in Japan Derived from the Basic Resident Registers, Ministry of Internal Affairs and Communications

Comparison of Net Migration Loss in Tohoku Prefectures (2017) (people) Prefecture/ region (moving in) Departures Aomori Iwate Miyagi Akita Yamagata Fukushima Tohoku total Outside Tohoku total total Tokyo area only Aomori - 1,965 3,220 864 346 577 6,972 16,557 10,129 23,529 Iwate 1,898 - 4,656 923 466 691 8,634 12,385 7,794 21,019 Miyagi 2,214 3,546 - 1,659 2,720 3,912 14,051 33,275 19,748 47,326 Akita 916 1,113 2,461 - 611 440 5,541 9,725 6,306 15,266 Yamagata 303 450 3,594 492 - 1,130 5,969 10,430 6,599 16,399 Fukushima 469 683 5,076 468 1,012 - 7,708 24,649 13,993 32,357 (moving out) Tohoku total 5,800 7,757 19,007 4,406 5,155 6,750 48,875 107,021 64,569 155,896 Prefecture/ region Prefecture/ Outside Tohoku total 11,654 8,901 27,057 6,541 7,380 17,212 78,745 Tokyo area only 6,373 5,183 14,391 4,018 4,199 9,018 43,182 Arrivals total 17,454 16,658 46,064 10,947 12,535 23,962 127,620 Source: Annual Report on the Internal Migration in Japan Derived from the Basic Resident Registers, Ministry of Internal Affairs and Communications

_ 7 _ (5) The Number of Business Establishments (Private)

Private business establishments in Tohoku represent 7.4% of the national total, while the number of employees accounts for 6.6% of the national total.

●In 2016, the Tohoku region had 414,657 private business establishments or 7.4% of the national total of 5,578,975 es- tablishments(7.3% in 2014). The number of establishments decreased by 2.3% from the previous survey conducted in 2014. In particular, Akita, Aomori and Yamagata saw significant decreases of 3.4%, 3.0% and 3.0% respectively. ●In 2016, the total number of employees in Tohoku was 3,726,422, down 0.9% from the previous survey conducted in 2014.

Number of Private Establishments and Employees by Prefecture Number of private establishments Number of employees

2014 2016 Comparison to Comparison to the 2014 2016 Comparison to Comparison to the 2014 (%) national total (%) 2014 (%) national total (%) Aomori 60,866 59,069 ▲ 3.0 1.1 508,770 498,988 ▲ 1.9 0.9 Iwate 60,543 59,451 ▲ 1.8 1.1 536,313 525,264 ▲ 2.1 0.9 Miyagi 103,505 102,026 ▲ 1.4 1.8 1,010,795 1,006,886 ▲ 0.4 1.8 Akita 51,156 49,432 ▲ 3.4 0.9 418,534 413,719 ▲ 1.2 0.7 Yamagata 58,292 56,551 ▲ 3.0 1.0 480,627 475,435 ▲ 1.1 0.8 Fukushima 89,971 88,128 ▲ 2.0 1.6 803,372 806,130 0.3 1.4 Tohoku 424,333 414,657 ▲ 2.3 7.4 3,758,411 3,726,422 ▲ 0.9 6.6 Japan 5,779,072 5,578,975 ▲ 3.5 100.0 57,427,704 56,872,826 ▲ 1.0 100.0 (Note)The number of private establishments includes businesses whose business details are unclear. Source: 2014 Economic Census for Business Frame and 2016 Economic Census for Business Activity (Preliminary Report), Ministry of Internal Affairs and Communications and the Ministry of Economy, Trade and Industry

●In terms of the ratios of private business establishments by industry (major group category), wholesale and retail trade had the largest share at 26.6%, followed by accommodation and food services at 12.4% and construction at 10.9%. The tertiary industry had a significant share at 81.2%. In comparison to 2014, medical and welfare services increased their share by 0.3 points, while manufacturing and wholesale and retail trade decreased its share by 0.2 points.

Changes in Ratios of Private Establishments by Industry (Major Group Category) (%) 1.0 0 0.1 0.1 0.8 0.9 100 Living-related Medical, 2014 Accommodations, SERVICES, Construction Manufacturing Wholesale and retail and personal services health care 2.3 1.7 5.7 3.5 eating and drinking services 2.7 N.E.C. 414,900 10.9 7.1 26.8 and amusement services and welfare establishments 12.3 10.3 7.3 6.8

2016 405,012 10.8 6.9 26.6 12.3 10.2 7.6 6.7 establishments

Mining and quarrying of stone Transport and postal services 2.4 Finance and Scientific research, professional Education, Compound services Agriculture, Forestry 0.1 insurance 1.7 and technical services 3.5 learning support 0.8 and Fisheries 1.0 Information and communications 0.7 2.7 Real estate and goods rental and leasing 5.6 Secondary industry Heat supply 0.1 Primary industry 4,100 establishments 72,204 establishments (1.0%) (17.8%) Tertiary industry 328,708 establishments(81.2%)

(Note)The number of business establishments by industry includes only those for which required values were obtained. Source: 2014 Economic Census for Business Frame and 2016 Economic Census for Business Activity (Preliminary Report), Ministry of Internal Affairs and Communications and the Ministry of Economy, Trade and Industry

_ 8 _ _ 9 _ ●In 2016, the total number of employees in the Tohoku region was 3,726,422 or 6.6% of the national total(6.5% in the previous survey). The ratio of employees in private business establishments by industry (major group category) was 1.3% for the primary industry, 26.2% for the secondary industry and 72.5% for the tertiary industry. In comparison to 2014, the ratio of employees in wholesale and retail trade decreased by 0.3 points, while the ratio in living-related services and leisure services decreased by 0.1 points.

Changes in Ratios of Employees by Industry (Major Group Category) (%)

1.2 0 0.1 0.4 1.2 1.3 100 2014 Accommodations, Construction Manufacturing Wholesale and retail eating and Medical, health care SERVICES, 5.3 2.4 2.0 2.3 4.5 2.5 3,758,411 9.7 16.3 21.3 drinking services and welfare N.E.C. persons 8.5 13.1 7.7

2016 3,726,422 9.8 16.3 21.0 8.5 13.2 7.7 persons Transport and Living-related and Mining and quarrying of stone postal services 5.4 Finance and insurance 2.4 Education, Compound services personal services learning support 2.6 1.3 Agriculture, Forestry 0.1 Information and Real estate and and Fisheries 1.3 goods rental and leasing 2.0 and amusement services communications1.2 4.4 Secondary industry Heat supply 0.5 Scientific research, professional Primary industry and technical services 2.4 48,098 establishments 975,825 establishments (1.3%) (26.2%) Tertiary industry 2,702,499 establishments(72.5%)

(Note) The number of employees by industry for 2014 is as of July 1, 2014, and that for 2016 is as of June 30, 2016. Source: 2014 Economic Census for Business Frame and 2016 Economic Census for Business Activity (Preliminary Report), Ministry of Internal Affairs and Communications and the Ministry of Economy, Trade and Industry

_ 9 _ (6) Industrial Production

2017 showed a gradual recovery in industrial production.

●The Tohoku Region’s Index of Industrial Production (IIP) in 2017 increased by 3.6% from the previous year to 101.1 (2010=100). ●By quarter, the IIP (seasonally adjusted: 2010=100) in the 1ST quarter of 2017 rose 0.3% from the previous year to 100.2 mainly by transport machine industry with the new model car effect. In the 2nd quarter, the IIP rose 0.5% from the previous year to 100.7 mainly by machine industry for business, production and industrial use thanks to semicon- ductor related business performing well. In the 3rd quarter, the IIP declined 0.2% from the previous year to 100.5 mainly due to metal products industry decreasing water gates. In the 4th quarter, the IIP rose 1.8% from the previous year to 102.3 mainly thanks to electronic parts and devices industry for automotive and smartphone shifting in high level. 2017, all over the year, showed a gradual recovery in industrial production. ●In the first three months of 2018, the IIP declined 1.9% from the previous year to 100.4 mainly by the influence of electronic parts and device products industry related with decreasing in production of connector, which had been shift- ing steadily so far.

Changes in the IIP (IIP) Annual IIP: original index; quarterly IIP: seasonally adjusted, 2010 = 100 120.0 Consumption tax hike from 5% to 8%. 110.0 102.3 100.7 100.0 101.1 100.2 100.5 100.4 90.0 89.3 85.7 80.0 Great East Japan 82.0 Lehman Shock Earthquake 70.0 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I 2011 2008 2009 2010 2012 2013 2014 2015 2016 2017

2010 2011 2012 2013 2014 2015 2016 2017 2018 Production in Tohoku Production in Japan

Changes in the IIP by Industry Sector (IIP) Annual IIP: original index; quarterly IIP: seasonally adjusted, 2010 = 100 140.0 128.7 130.0 134.2 120.0 119.6 110.0 112.0 108.8 108.7 100.0 90.0 80.0 70.0 60.0 57.3 50.0 53.2 40.0 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I 2011 2008 2009 2010 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 2017

2018 General-purpose, production and business oriented machinery Electronic parts and devices Information and communications electronics equipment Transportation equipment

(Note) The IIP for Japan is prepared by the Ministry of Economy, Trade and Industry, while the IIP for Tohoku is prepared by the Tohoku Bureau of Economy, Trade and Industry. (Note) The IIPs for both Tohoku and Japan are revised based on the figures for 2010 as the base values. The IIP for Japan is annualized for the period from January 2017. Source: Prepared by the Tohoku Bureau of Economy, Trade and Industry

_ 10 _ _ 11 _ ●In 2017, the IIP showed positive year-on-year growth for machine industry for business, production and industrial use (up 19.2%), and ceramic and stone products industry (up 11.4%) among others, while the IIP declined year-on-year for communications electronics equipment (down 13.4%), and metal products industry (down 8.4%). ●In terms of the level of contribution by industrial sector to the year-on-year IIP growth (3.6%), general-purpose, pro- duction and business oriented machinery, whose solid performance was aided by the demand for semiconductors, made a positive contribution (3.12). Electronic parts and devices, which both showed steady performance helped by the demand for in-car products and smartphones, also made a positive contribution (0.81). Meanwhile, information and communications electronics equipment, due to the decline in the production for mobile phones, "personal handy- phone systems" (PHSs), had a negative contribution (-0.77), to lower the overall IIP.

2017 Year-on-year Growth in IIP (%) 2017 Industry Sector Contribution (% point) to Year-on-year Production Growth (plus 3.6%)

General-purpose production and business oriented machinery 19.2 General-purpose production and business oriented machinery(1469.3) 3.12 Ceramic, stone and clay products 11.4 Electronic parts and devices(1687.4) 0.81 Plastic products 7.4 Transportation equipment(828.1) 0.63 Transportation equipment 6.6 Ceramic, stone and clay products(375.6) 0.41 Electronic parts and devices 4.5 Plastic products(286.3) 0.21 Iron and steel 2.8 Other manufacturing(625.3) 0.12 Pulp, paper and paper products 2.3 Pulp, paper and paper products(321.5) 0.07 Other manufacturing 2.0 Iron and steel(270.4) 0.07 Electrical machinery 1.2 Electrical machinery(434.6) 0.06 Mining 0.7 Mining(20.2) 0.00 Non-ferrous metals -0.8 Non-ferrous metals(244.3) -0.02 Chemical and petroleum products -2.0 Textile products(248.6) -0.13 Foodstuffs and tabacco -5.0 Chemical and petroleum products(807.8) -0.20 Textile products -7.1 Metal products(400.9) -0.41 Metal products -8.4 Foodstuffs and tabacco(1061.8) -0.42 Information and communication electronics products -13.4 Information and communication electronics products(917.9) -0.77 ( ) The figures in parentheses show the weight of the relevant industry sector.

(Note) Weight: The share of each industrial sector in the total (the entire industrial production=10,000) (Note) Contribution: Breakdown of the percentage change of the entire production by industry sector. It shows the impact of any changes in the production of the relevant sector on the entire production. Source: Prepared by the Tohoku Bureau of Economy, Trade and Industry

●By product category, the IIP of capital goods rose year-on-year by 14.8% (122.7) in 2017, thanks to contributions from semiconductor production equipment, industrial TV equipment and industrial robot and other equipment. Meanwhile, the IIP of construction materials dropped by 0.1% (107.8) and concrete block for revetment and others contributed to the decline. Durable consumer goods decreased by 8.3% (73.3). mobile phones, "personal handy-phone systems" (PHSs), interchangeable lens for camera and laptop computers contributed to the decline. Non durable consumer goods dropped by 4.1% (92.5). Sweets and other products caused the negative impact on IIP. The IIP of producer goods rose year-on-year by 4.1% (101.1). metal oxide semiconductor ICs (Logic), metal oxide semiconductor ICs (Memory), car audio and other products contributed to the decline. Connector, engine parts, fine ceramics (General structural material) and other products contributed to the ascending.

(IIP) IIP Trend by Goods 2010 = 100 130.0 122.7 120.0

110.0 107.8 100.0 101.1 92.5 90.0

80.0 73.3 70.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Capital goods Construction goods Consumer durables Consumer non-durables Producer goods

Source: Prepared by the Tohoku Bureau of Economy, Trade and Industry

_ 11 _ (7) Consumption

Consumption is in stepping state.

●In 2017, department stores and supermarkets in the Tohoku region recorded 1,230.6 billion yen in sales on an all-store basis, down 0.8% from the previous year for the first time in six years. Sales at existing stores shrank by 1.1% year- on-year, declining for five consecutive years. ●In terms of year-on-year comparison of sales by store type (on an all-store basis), department store sales decreased 1.9%, for a five consecutive year of decrease, and supermarket sales decreased 0.5% for the first time in seven years.

Department Store/ Supermarket Sales Value and Year-on-year Changes (All Store Basis) (100 million yen) (Y to Y comparison,%) 14,000 6.0 Y to Y comparison (right axis) Supermarkets only 1,230.6 billion yen 12,000 4.0

10,000 2.0 Supermarkets

8,000 -0.5 0.0 -0.8 6,000 -1.9 -2.0 Department stores only 4,000 -4.0

2,000 -6.0 Department stores 0 -8.0 2010 2011 2012 2013 2014 2015 2016 2017

(Note)The sales value is partially expanded using the link coefficient (for the period up to June 2015). Source: Current Survey of Commerce, Ministry of Economy, Trade and Industry

_ 12 _ _ 13 _ (8) Private Sector Capital Expenditures

For fiscal year 2018, the private sector increased its planned capital spending because the manufacturing industry was expected to greatly increase capital spending in Transport machinery and other areas.

●The private sector’s capital expenditures in the To- Year-on-year Changes in Capital Expenditures hoku region amounted to 605.5 billion yen (accord- (%) in the Tohoku Region 40.0 ing to the June 2018 survey) in fiscal year 2018, 35.6 up 19.7% from the previous year. The manufac- 30.0 23.0 27.6 turing industry planned to increase its capital ex- 20.0 19.7 22.1 penditures by 27.6% from the previous year. The 11.9 10.0 non-manufacturing industry planned to increase its 6.1 capital expenditures by 11.9% from the previous 0.0 year (or a 6.1% increase in capital spending by the -10.0 non-manufacturing industry, excluding electrici- -9.7 ty). However, the actual capital expenditures in -20.0 the Tohoku region for fiscal year 2017 turned out -30.0 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 to be 23.0% higher than that of fiscal year 2016. Actual Actual Actual Actual Actual Actual Plan This reflects a 9.7% year-on-year decrease in cap- All industries Non-manufacturing ital spending by the manufacturing industry and a Manufacturing Non-manufacturing (excl. electricity) 35.6% increase by the non-manufacturing indus- (Note) The published data were recalculated for the six Tohoku prefectures. The same shall apply hereinafter. try (or 22.1% increase in capital spending by the Source: Survey on Planned Capital Spending in the Tohoku Region, non-manufacturing industry excluding electricity). Development

●By industrial sector, the amount of capital expenditures by the manufacturing industry in fiscal year 2018 is projected (Note)The sales value is partially expanded using the link coefficient (for the period up to June 2015). to highly increase over the previous year in Transportation equipment and to increase over the previous year in Paper/ Source: Current Survey of Commerce, Ministry of Economy, Trade and Industry pulp and Foods, Electrical machinery. On the other hand, the amount of capital expenditures by the non-manufactur- ing industry is projected to increase in many sectors, such Electricity as Renewable energy, Transport and Real estate.

Capital Spending Trend (FY 2018 Plan)

Year-over-year change in FY 2018 Transportation 170.0 equipment Percentage ratios in FY 2017 192.1 4.9

120.0 Precision Comminication Paper/ machinery Foods Real estate and information pulp 41.5 40.6 Iron and steel 55.4 52.8 Other 49.1 1.4 non-manufacturing 70.0 4.1 41.7 Wholesale and 4.8 Transport 3.6 4.1 Electrical Electricity - 76.2 1.2 retail trade 32.1 Non-ferrous machinery 29.1 4.8 metals 17.1 7.8 12.7 14.1 Services 9.0 8.4 6.2 20.0 4.5 - 38.3 5.2

Chemicals general

Y to Y change in FY 2018 (%) change in FY Y to Y Gas - 3.3 machinery -30.0 Ceramic clay and Construction 5.8 Leasing 7.0 Petroleum stone products - 2.1 -11.6 - 4.6 Textile Other manufacturing 1.3 - 17.2 - 7.3 6.1 2.4 1.7 - 50.0 - 31.1 0.7 3.2 0.1 3.9 -80.0 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 Percentage ratios of capital spending by industry sector in FY 2017 (%)

Source: Survey on Planned Capital Spending in the Tohoku Region, Development Bank of Japan

_ 13 _ ●By prefecture, the amount of capital Changes in Capital Expenditures by Prefecture expenditures in fiscal year 2018 in- (100 million yen) dicates an increase of 13.8% for Ao- 1600 38.0% 13.5% mori, an increase of 18.7% for Iwa- 1400 1200 Non- te, an increase of 38.0% for Miyagi, 852 manufacturing 541 1000 an increase of 4.4% for Akita, an 519 Y o Y change of increase of 11.2% for Yamagata and 800 FY 2018 plan 672 11.2% an increase of 13.5% for Fukushi- 600 13.8% 18.7% 4.4% 206 243 Manufacturing ma, which is planned to increase in 400 816 248 171 654 140 676 234 160 170 all prefectures. 200 419 361 388 134 171 159 209 181 226 0 FY 2017 FY2018 FY 2017 FY2018 FY 2017 FY2018 FY 2017 FY2018 FY 2017 FY2018 FY 2017 FY2018 Actual Plan Actual Plan Actual Plan Actual Plan Actual Plan Actual Plan Aomori Iwate Miyagi Akita Yamagata Fukushima Source: Survey on Planned Capital Spending in the Tohoku Region, Develop- ment Bank of Japan

_ 14 _ _ 15 _ (9) Acquisition of Plant Locations

Acquisition of plant locations has decreased for the first time in two years.

●In 2017 (from January to December), the number of acquisitions for plant locations (excluding electricity) in the To- hoku region decreased by 13 (or 12.1%) to 94 from the previous year, the first decreased in two years. The region’s share of the national total went down by 1.5 points to 9.3%. ●By prefecture, Fukushima had the largest number of acquisitions at 30 (16 in 2016), followed by Miyagi at 23 (47 in 2016), Yamagata at 21 (21 in 2016), Iwate at 11 (8 in 2016), Akita at 5 (9 in 2016) and Aomori at 4 (6 in 2016). Ac- quisitions for relocation in the coastal areas which were affected by the Great East Japan Earthquake, decreased by 4 to 11 from the previous year (such acquisitions are involved with plans to close down all or part of existing plants).

Changes in Number of Acquisitions for Plant Locations (Acquisitions) (%) 250 11.0 12 Aomori Share of national total 10.8 10.3 Iwate (right axis) 10.0 11.4 Miyagi 9.2 9.3 10 200 Akita 8.5 8.6 8.7 8.0 Yamagata 163 8 Fukushima 150 137

107 107 6 4 91 94 100 88 89 84 78 74 11 4 23 5 50 21 2 30 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (Note 1) The above figures correspond to the acquisition (including leasing) of land with a size of 1,000 square meters or larger for use to build a fac- tory, business office or research center for industries in manufacturing, the electricity industry (excluding hydraulic power plants, geo-thermal power plants and solar power plants(*)), gas or heat supply. They do not include the number of acquisitions of plant locations for vacant plants or for-lease plants that have increased after the Great East Japan Earthquake. (Note 2) As for solar power plants out of the electricity industry are excluded from the surveys for 2015. Source: Survey of Factory Location Trends in Tohoku in 2017 (January to December, Preliminary Report), the Tohoku Bureau of Economy, Trade and Industry

●The top four industrial sectors in terms of the number of land acquisitions for plants locations are: foodstuffs (23), Transportation equipment (10), Metal products and Production machinery (8) and Ceramic, clay and stone products (7). By prefecture, the number of acquisitions for foodstuffs in the highest in Miyagi (9), followed by Fukushima (6), while Transportation equipment in the highest in Yamagata (4).

Distribution of Plant Location Acquisitions by Industry Sector and Prefecture (2017) (Acquisitions) 0 5 10 15 20 25 Foodstuffs Transportation equipment Metal products Production machinery Ceramic, clay and stone products Plastic products Electronics/ devices Business oriented machinery Textile products Electrical machinery Lumber and wood products Aomori Chemical products Iwate Pulp/ paper Miyagi Iron and steel Akita Non-ferrous metals Yamagata Printing Fukushima Beverages/ taacco/ feedstuff (Note) Excludes the electricity industry Source: Survey of Factory Location Trends (2017 Preliminary Report), the Tohoku Bureau of Economy, Trade and Industry

_ 15 _ (10) Labor Force Population

The number of employed persons was 4.52 million, and the number of unemployed persons was 130,000.

●In 2017, the number of employed persons in the Tohoku region was 4.52 million, which is above the figure for 2010, a year before the Great East Japan Earthquake. Meanwhile, the number of unemployed persons was 130,000 which was as low as the previous years, or the rate was 2.8%, which is below the figure for the previous year.

Number of Employed Persons Changes in the Unemployment Rate in the Establishments and the Number of Unemployed Persons (10,000 persons) (10,000 persons) (%) 480 70 7.0 473 6.0 5.7 470 469 60 5.3 6.0 4.8 4.7 462 50 4.7 4.5 5.0 460 5.1 5.1 4.0 452 40 4.6 3.6 3.6 4.0 450 449 449 449 451 4.3 450 4.1 3.9 4.0 4.0 3.1 446 447 29 2.8 30 27 3.6 3.4 3.0 442 24 25 3.1 23 23 21 440 19 2.8 20 16 16 2.0 14 13 430 10 1.0

420 0 0.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (Note) The figure for 2011 is an estimate made as supplementary data Number of unemployed persons due to the impact of the Great East Japan Earthquake. Tohoku (right axis) Japan (right axis) Source: Labor Force Survey, Ministry of Internal Affairs and Communications Source: Labor Force Survey, Ministry of Internal Affairs and Communications

●By industrial sector, the largest number of employed persons is in the wholesale and retail sector, reaching 740,000 (16.4%), followed by manufacturing with 690,000 (15.3%), medical and welfare services with 560,000 (12.4%), con- struction with 460,000 (10.2%), and agriculture and forestry with 290,000 (6.4%). ●As for number of employed persons in the establishments, the number of employed women between the ages of 25 to 44 who have a young child (or children), shows a downward trend, but the number of employed persons (men and women) aged 65 and over is increasing. The ratio of both employed women between the ages of 25 to 44 who have a young child (or children) and employed persons (men and women) aged 65 and over gets higher.

Number and Ratio of Employed Persons Number of Employed Persons by (Women Aged 25-44, and Men and Women Aged 65 and Over) Industrial Sector (2017) (10,000 persons) (%) 90 90 Industries unable Government service to classify 4 80.0 producers 19 Fisheries 4 Mining and 80 80 quarrying of stone 0 Agriculture Compound services 6 and 70 70 SERVICES Forestry 27 29 60 60 Construction 46 Medical, 50 50 health care and welfare 56 4.52 million persons 83 80 40 78 76 40 Manufacturing in total 69 63 Education, <10,000s of people> 30 30 learning support 21 42 42 45 Living-related and 20 23.2 20 personal services 16 Heat supply 3 Information and 10 10 Accommodations, eating communications 5 and drinking services 24 Wholesale and retail 74 Transport and 0 0 Scientific research, postal services 22 2002 2007 2012 2017 professional and technical services 11 Finance and insurance 10 Employed women Employed men and women Real estate and aged 25 to 44 in Tohoku aged 65 and over in Tohoku goods rental and leasing 5 Women aged 25 to 44 Men and women aged 65 in Tohoku (right axis) and over in Tohoku (right axis) Source: Labor Force Survey, Ministry of Internal Affairs and Source: Labor Force Survey, Ministry of Internal Affairs and Communications Communications _ 16 _ _ 17 _ (11) Employment

Both the new job openings-to-applicants ratio and active job openings-to-applicants ratio remain high.

●In 2017, the annual average for active job openings-to-applicants ratio in Tohoku region was 1.44, which was nearly as high as the national average of 1.50. In addition, the new job openings-to-applicants ratio in Tohoku was 1.99, which was also nearly as high as the national average of 2.24. ●The active job opening-to-applicants ratio in the period of I, 2018 in Tohoku was 1.53, which is the highest since the first year these statistics were collected. The job market continues to improve.

Changes in the Active Job Openings-to- Active Job Openings-to-Applicants Ratio Applicants Ratio in Tohoku and Japan by Prefecture (Double) (Double) 2.7 1.8 2017 average Japan (new job openings-to-applicants ratio) 2.24 Tohoku (new job openings-to-applicants ratio) 1.99 1.6 2.2 Japan (active job openings-to-applicants ratio) 1.50 Tohoku (active job openings-to-applicants ratio) 1.44 1.4

1.7 1.2

1.0 1.2 2017 average Aomori 1.24 0.8 Iwate 1.40 Miyagi 1.59 0.7 Akita 1.35 0.6 Yamagata 1.54 Fukushima 1.45 0.2 0.4 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 2018 2018 Japan (new job openings-to- Japan (active job openings-to- Aomori Miyagi Yamagata applicants ratio) applicants ratio) Iwate Akita Fukushima Tohoku (new job Tohoku (active job openings-to-applicants ratio) openings-to-applicants ratio)

Source: Employment Referrals for General Workers, Ministry of Health, Labor and Welfare

_ 17 _ (12) Business Entry and Exit Rates

Both the business entry rate and the business exit rate decreased.

●According to employment insurance statistics in fiscal year 2017, the business entry rate in the Tohoku region was 4.05%, which was decrease for the first time in two years. Since fiscal year 2014, the business entry rate which had increased since the Great East Japan Earthquake has remained almost flat. The business entry rate for Japan has de- creased for the first time in seven years to reach 5.55%. ●In Tohoku, the business exit rate was 3.24%, which was decreased for the first time in three years. The national rate was 3.49%.

(%) Changes in Business Entry and Exit Rates in Japan and Tohoku 6.00 5.60 5.55

5.50 5.18 Business entry rate in Japan 4.96 4.86 5.00 4.81 4.80 4.51 Business entry rate in Tohoku 4.74 4.50 4.24 4.22 4.27 4.49 4.58 4.09 4.04 4.05 3.96 4.00 3.82 4.00 3.71 3.79 3.60 Business exit rate in Japan 3.91 3.90 3.49 3.76 3.50 3.47 3.52 3.32 3.24 3.00 3.17 Business exit rate in Tohoku 2.50 2010 2011 2012 2013 2014 2015 2016 2017

The business entry and exit rates are calculated using the following formulas based on data from the Annual Reports on Employment Insurance Services: Business entry rate= Number of business establishments newly applying for employment insurance in the relevant business year / Number of business establishments covered by employment insurance as of the end of the previous business year x 100 (%) Business exit rate= Number of business establishments that ceased to be covered by employment insurance in the relevant business year / Number of business estab- lishments covered by employment insurance as of the end of the previous business year x 100 (%) *The business establishments covered by employment insurance refer to business establishments that have an insurance relationship for employment insurance pur- suant to the provisions of the Act on the Collection, etc., of Insurance Premiums of Labor Insurance. An existing business establishment does not become a business establishment covered by employment insurance until it hires an employee. Source: Monthly and Annual Reports on Employment Insurance Services, Ministry of Health, Labor and Welfare

●The business entry rate by prefecture was higher than the previous year in Akita and Yamagata in fiscal 2017, and oth- er prefectures were decreased. In terms of the difference between the business entry rate and the business exit rate in fiscal year 2017, the business entry rate exceeded the business exit rate by 2.06 points for Japan and by 0.81 points for Tohoku. By prefecture, the business entry rate exceeded the business exit rate in Miyagi, Yamagata and Fukushima, while the business exit rate was higher than the business entry rate in Aomori, Iwate and Akita.

Changes in Business Entry Rate Business Entry and Exit Rates (%) in Tohoku by Prefecture (%) in FY 2017 7.00 7.00

Business entry rate 6.00 5.55 6.50 5.19 Miyagi 5.00 4.85 6.00 4.05 Fukushima 5.65 4.00 3.43 3.32 3.14 3.43 5.50 3.00 2.80 5.19 2.06 2.13 1.71 5.30 2.00 5.00 1.00 0.81 Iwate 4.85 0.21 4.50

Business exit rate 0.00 Yamagata -0.07 -0.27 4.00 Aomori 1.00 -0.59 3.49 3.43 2.00 3.50 3.40 3.32 3.00 Akita 3.14 3.06 3.14 3.21 3.49 3.24 3.39 3.40 3.39 3.23 3.00 4.00 2.70 2.80 2.50 5.00 2010 2011 2012 2013 2014 2015 2016 2017 Japan Tohoku Aomori Iwate Miyagi Akita Yamagata Fukushima (Note) Plotting (-) on each bar indicates the difference in rate between business entry and exit.

Source: Monthly and Annual Reports on Employment Insurance Services, Ministry of Health, Labor and Welfare _ 18 _ _ 19 _ (13) Internationalization ① Trade Exports increased for the first time in two years, and imports increased for the first time in three years.

●In 2017, exports (Note) from the Tohoku region increased for the first time in two years for a total of 708.7 billion yen, an increase of 15.4% from the previous year. This was attributable to an increase in the export of Motors, Phar- maceuticals etc. despite a decrease of Ships etc. Meanwhile, imports (Note) increased for the first time in three years for a total of 1594.4 billion yen, an increase of 22.8% from the previous year. This was attributable to an increase of crude oil/ raw oil/ coal despite a decrease of Inorganic compound. The Tohoku region accounted for 0.9% of Japan’s exports (0.9% in 2016) and 2.1% of its imports (2.0% in 2016).

Changes in the Value of Exports and Imports Handled in the Tohoku Region (100 million yen) (%)

20,000 18,742 2.5 18,000 16,467 17,406 2.1 2.0 1.9 16,000 15,548 15,944 2.0 14,309 15,176 14,000 13,021 12,978

12,000 10,668 1.5 10,000 8,284 7,655 7,949 0.9 0.9 0.9 8,000 1.0 6,484 7,087 6,000 5,003 6,344 6,561 6,142 4,425 5,521 3,886 4,000 0.5 2,000 0 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Exports Imports Share of Japan’s exports (right axis) Share of Japan’s imports (right axis)

(Note) The value of cargo that passed through export and import custom clearances at the custom offices in the six Tohoku prefectures. Source: Overview of Trade in the Tohoku Region, Customs, Ministry of Finance

●By , - Port handles the largest volume of goods in the Tohoku region based on the value of ex- , followed by the Port of and Sakata Port. Based on the value of imports, Sendai-Shiogama Port ranked first, followed by Onahama Port and the Port of Hachinohe. In comparison with the previous year, Soma Port and Sakata Port etc. increased in exports, Sendai-Shiogama Port, Onahama Port etc. increased in imports.

2016/ 2017 Trade Value by Port in the Tohoku Region (100 milliion yen) (100 milliion yen) 4,000 3,000 2,000 1,000 0 0 2,000 4,000 6,000 8,000 46 Aomori Port 148 Exports 57 229 Imports 1,256 Port of Hachinohe 1,486 2016 1,238 1,609 2016 39 5 2017 44 Miyako Port 11 2017 95 30 94 Kamaishi Port 53 95 41 102 Port of Ofunato 33 62 397 103 Port 427 2,593 5,477 2,634 Sendai-Shiogama Port 6,599 87 59 133 44 514 1,573 673 Akita Port/ Funagawa Port 1,685 644 713 879 Sakata Port 825 424 768 673 Soma Port 1,133 284 2,278 452 Onahama Port 3,284

Source: List of the Value of Trade by Port in Japan, Customs, Ministry of Finance

_ 19 _ ●Major destinations of Tohoku’s exports are the (U.S.), the People’s Republic of (PRC) and the Republic of (POK), while the major sources of imports are , the PRC and the U.S. ●Major export items include motors, office equipment and rubber products, while import items include metallic ores/ scraps, crude oil/ raw oil, and coal.

2017 Major Destinations of Exports 2017 Major Destinations of Imports (Countries/ Regions) (Countries/ Regions) U.S. Australia 24.3% 15.5% Other 20.4% Other Indonesia 3.1% 29.9% PRC 12.4% Netherland 3.5% UK 3.6% ROK 3.2% Philippines 4.2% PRC U.S. 20.3% 4.2% 11.4% 4.3% Kuwait 4.6% Thailand 4.5% Saudi Arabia 4.8% Russia 4.7% ROK 7.2% United Arab Emirates (UAE) 4.7% 4.5% Indonesia 4.7%

2017 Percentage Ratios 2017 Percentage Ratios of Exports Items by Value of Import Items by Value

Motors Organic compound Metallic ores 13.0% / scrap Office equipment 2.4% Other Other 9.4% 17.4% Petroleum products 26.6% 37.5% 2.6% Crude oil / raw oil Rubber products Grains and entraining 17.1% 8.5% products 3.0% Coal Seafood/ 15.8% Iron and steel 8.1% Wood and cork products seafood products 2.9% (excl. furniture) 3.1% Pump / centrifuge 3.1% Ships 5.3% Liquefied Paper/ paper products 4.6% petroleum gas Liquefied natural gas 4.1% Memory devices (including those Seafood / containing recorded data) 3.2% Metallic ores/ scrap 4.3% 3.8% seafood products 4.1% Source: Overview of Trade in the Tohoku Region, Yokohama Customs, Ministry of Finance

●Approximately 33.4% of marine export cargo comprised of products produced in the Tohoku region, was loaded in international containers at the port of Yokohama, while 29.2% was loaded at the . This indicates that a large proportion of cargo was loaded at ports located outside the Tohoku region. 19.1% was loaded at Sendai-Shiog- ama Port. Meanwhile, 32.8% of marine import cargo comprised of goods to be consumed in the Tohoku region, were unloaded at the Port of Tokyo, 22.4% at Sendai-Shiogama Port and 17.1% at the Port of Yokohama.

Ports of Loading for Export Cargo (tons) Ports of Loading for Import Cargo (tons) (November 2013) (Place of production: Tohoku) (November 2013) (Place of production: Tohoku)

Other ports outside the Tohoku region 4.6 % Other ports outside the Tohoku region 5.4 % Other ports in the Tohoku region 2.4 % Other ports in the Tohoku region 5.8 % Port of Hachinohe 5.4 % Port of Hachinohe 4.1 % Akita Port 5.9 % Port of Tokyo Port of Yokohama Akita Port 32.8 % 33.4 % 12.3 % Sendai-Shiogama Port 19.1 % Port of Yokohama 17.1 % Port of Tokyo Sendai-Shiogama Port 29.2 % 22.4 %

(Note) The survey is concluded once every five years to gain a grasp of the movements of international containers in detail. Source: FY 2013 Survey Results of Japan’s Export and Import Container Cargo Movements, Ports and Harbors Bureau, Ministry of Land, Infrastructure, Transport and Tourism _ 20 _ _ 21 _ ② Internationalization of Corporate Activities The number of overseas subsidiaries of companies headquartered in the Tohoku region increased.

●As for companies that have headquarters in Tohoku in FY 2015 (1,633 responding companies), there were 108 compa- nies holding subsidiaries overseas and affiliates overseas, while the number of subsidiaries overseas was 243 compa- nies. Looking at the breakdown of the country of residence, China is the largest with 94 companies (composition ratio 38.7%), followed by Asia (excluding China) 92 (37.9%) and North America 28 (11.5%). ●Also, looking at overseas transactions by companies with headquarters in the Tohoku region (FY2015), the export value of goods (the number of responding companies: 169 companies) was 406.9 billion yen. Meanwhile, the import value of goods (the number of responding companies: 175 companies) was 368.5 billion yen.

Changes in the Number of Overseas Subsidiaries/ Changes in Value of Exports and Imports Affiliates Owned by Companies Headquartered by Companies Headquartered in the Tohoku Region (Companies) (100 million yen) in the Tohoku Region 300 5,000

4,468 242 243 250 231 225 15 219 13 4,139 10 13 4,056 4,069 25 15 28 4,032 22 23 200 17 21 16 4,000 180 17 13 2 14 3,622 23 3,785 3,685 150 16 94 90 97 91 3,527 3,505 85 108 3,378 3,382 72 104 100 3,000

50 86 88 84 91 92 67

0 2,000 2010 2011 2012 2013 2014 2015(FY) 2010 2011 2012 2013 2014 2015(FY) (Year-end) Value of Exports Value of Imports Asia (excl. China) China North America Other regions The number of companies holding overseas subsidiaries

(Note1) The Basic Survey of Japanese Business Structure and Activities targets companies that own a business establishment engaging in mining, manu facturing, electricity and gas, wholesale, retail, services or other businesses with 50 or more employees and a capital equity investment amounting to 30 million yen or more. (Note2) In principle, the subsidiary overseas is a company with a voting right ownership ratio of more than 50%, and the affiliates are 20 to 50% of the company. Source: Basic Survey of Japanese Business Structure and Activities, Ministry of Economy, Trade and Industry

●As for the foreigners staying in the Tohoku region at the end of 2017, the number of those whose status of residence is “skill training” was 12,962, which was an increase by 16.6% compared to the end of the previous year.

Changes in the Number of the Foreigners as “Skill Training” (Persons) (%) 16,000 5.0 4.9 4.6 4.9 4.7 4.3 4.7 4.5 14,000 12,962 3.8 4.0 12,000 3.5 11,120 1,650 National Total (right axis) 3.5 2,553 10,000 8,988 3.0 7,782 8,000 2.5 6,641 3,283 5,828 6,000 2.0 4,932 4,942 847 1.5 4,000 1,563 1.0 2,000 3,066 0.5 0 0.0 2010 2011 2012 2013 2014 2015 2016 2017 (Year-end) Aomori Iwate Miyagi Akita Yamagata Fukushima

(Note) As a result of the amendment of Immigration Control and Refugee Recognition Act in July 2012 and introduction of the new residence management system, it is not possible to simply compare 2011 and 2012.Source: Statistics on Foreign Resident in Japan (formerly Statistics on Registered Aliens), Ministry of Justice * The number of the status of residence as “technical training” _ 21 _ ③ International Arrivals / Departures and Foreign Residents The number of immigrants who used ports and airports in Tohoku has greatly increased.

●The total number of people arriving and departing through ports and airports in Tohoku in 2017 was 409,947, which was 57% increase from 261,136 in 2016. The number of foreigners entering and departing greatly increased, exceeding 2010 for the first time after the Great East Japan Earthquake. The number of immigrants entering Sendai Airport (44.3% increase over the previous year) and Aomori Airport (110.1% increase) greatly increased. The nationwide ratio of the number of people entering and leaving the port in Tohoku and the airport was 0.5% (0.3% in the previous year). Changes in International Arrivals and Changes in the Number of Departures through Ports and Airports in Tohoku International Arrivals and Departures (Japan) No. of departures (1,000 people) No. of arrivals No. of departures (1,000 people) No. of arrivals 300 200 100 0 100 200 300 60,000 40,000 20,000 0 20,000 40,000 60,000

2010 229 117 112 113 111 224 2010 26,225 9,588 16,637 16,612 9,589 26,201

2011 85 36 49 49 33 82 2011 24,329 7,335 16,994 16,921 7,281 24,202

2012 133 40 93 91 42 133 2012 27,724 9,233 18,491 18,408 9,309 27,717

2013 131 52 79 80 54 133 2013 28,761 11,289 17,473 17,422 11,385 28,807

2014 132 54 78 73 60 132 2014 31,024 14,120 16,903 16,916 14,294 31,210

2015 135 72 63 60 76 137 2015 35,842 19,629 16,214 16,259 19,842 36,101

2016 129 75 54 53 79 132 2016 40,300 23,184 17,116 17,088 23,386 40,475

2017 205 139 65 62 143 205 2017 45,242 27,353 17,889 17,876 27,603 45,480 Non-Japanese nationals/others Japanese Japanese Non-Japanese nationals/others Non-Japanese nationals/others Japanese Japanese Non-Japanese nationals/others Source: Annual Report on Overseas Arrivals and Departures Statistics, Ministry of Justice ●There were 55,646 foreign residents in the Tohoku region as of the end of December 2017, which was 6.4% increase from the previous year. By nationality, there were 16,079 Chinese residents, representing 28.9% of the total, followed by residents from the ROK/ Korea (9,212 people, or 16.6%), those from Vietnam (8,538 people, or 15.3%) and those from Philippines (7,337 people, or 13.2%). Recently, the number of foreign residents from Vietnam has been rapidly increasing. Changes in the Number of Foreign Residents (Number of people who used to be registered (No. of people) under the now-obsolete alien registration system) Note (%) 70,000 10.0 5.8 3.9 3.8 7.4 6.4 -0.4 60,000 0.0 -4.6 55,646 Other regions 795 52,298 839 -12.1 North America 2,388 48,732 48,683 Europe 1,510 -10.0 50,000 46,014 44,349 Indonesia 1,571 42,857 42,691 Nepal 2,188 Vietnam 8,538 -20.0 40,000 Philippines 7,337 -30.0 30,000 Other Asian countries 5,189

ROK/ North Korea -40.0 20,000 9,212

-50.0 10,000 China 16,079

-60.0 0 2010 2011 2012 2013 2014 2015 2016 2017 (Year-end)

China ROK/ North Korea Other Asian countries Philippines Vietnam Nepal Indonesia Europe North America South America Other regions YOY change (right axis) (Note 1) “Other Asian countries” for 2010, 2011 and 2012 represent Asia counties excluding China and the ROK/ North Korea. (Note 2) Following the revisions to immigration Control and Refugee Recognition Act and the introduction of a new management system for foreign residents in Japan in July 2012, the Alien Registration Act was abolished. Accordingly, the above statistics cover “medium- to long-term residents” and “special permanent residents” who are managed under the new foreign resident management system (hereinafter, collectively referred to as “foreign residents”). As a result of these changes to the system, the figures for foreign residents under the new system and registered aliens under the old system do not match. It is therefore impossible to simply compare the number of foreign residents and the number of people who used to be registered under the alien registration system. Source: Statistics on Foreign Resident in Japan (formerly Statistics on Registered Aliens), Ministry of Justice _ 22 _ _ 23 _ (14) Tourism ① Domestic Tourism The number of inbound tourists to the Tohoku region has been increasing over the past four years.

●The number of inbound tourists to the Tohoku region decreased considerably in 2011 after the Great East Japan Earth- quake, but recovered to 251.6 million in 2015.

Changes in the Number of Inbound Tourists to the Tohoku Region (Million people) (%) 300 30

265.9 Y o Y change (right axis) 251.6 243.8 250 34.2 238.0 20 226.6 Aomori 33.2 34.0 35.2 29.0 197.2 33.0 Iwate 200 28.8 28.9 29.0 10 61.3 31.5 27.4 3.2 22.7 55.7 57.4 Miyagi 150 52.1 60.7 0 43.9 43.2 Akita 32.1 32.1 31.9 100 31.7 -10 29.4 40.4 Yamagata 44.6 38.0 39.8 44.5 35.2 50 -20 57.2 Fukushima 44.5 48.3 46.9 50.3 35.2 0 -30.0 2010 2011 2012 2013 2014 2015 Source: Graphic Illustration of Transport in Tohoku/Statistics on Tourism in Each Prefecture, Tohoku District Transport Bureau

●In 2017, the total number of overnight guests in each prefecture increased in Miyagi and Fukushima. ●Compared to the previous year, overall consumption by tourists and consumption per capita increased in 2016 in Ao- mori and Miyagi while these figures decreased in Iwate and Akita. In Yamagata, consumption per capita increased.

Changes in the Total Number of Changes in Tourism Consumption Overnight Guests in Each Prefecture in Each Prefecture (Japanese/ tourism) (Thousand people) (Thousand people) (100 million yen) (Yen/ per capita per visit) 14,000 700,000 2,500 20,000

12,000 600,000 10,858 2,000 16,000 10,000 500,000 13,400 9,981 11,221 1,500 12,000 8,000 400,000 9,196 6,076 8,475 6,000 300,000 7,891 1,000 8,000 5,242 6,041 4,000 4,624 200,000 1,092 951 1,950 680 1,503 1,989 3,346 500 4,000 2,000 100,000 509,597 0 0 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Aomori Iwate Miyagi Aomori Iwate Miyagi Akita Yamagata Fukushima Akita Yamagata Fukushima Japan (right axis) Tourism consumption Unit value of tourism consumption (right axis) Note: For the period from January to March 2010, the number of tourists Note 1 : Tourism consumption refers to the total value of consumption by represents the number of those staying at accommodation facilities inbound tourists visiting the relevant prefecture(s). with staff of 10 or more employees. Note 2 : The unit value of tourism consumption refers to tourism consumption Source: Statistics on Overnight Trips, Japan Tourism Agency per inbound tourists visiting the relevant prefecture(s) during one visit. Note 3: The in 2016 is being calculated. Source: Tourist entrance statistics, Japan Tourism Agency _ 23 _ ② Foreign Tourism

The total number of international overnight visitors in Tohoku increased, exceeding that of the national rise.

●In 2017, the total number of Changes in the Total Number of International Overnight Visitors for Each Prefecture international overnight visi- (1,000 people) 90,000 tors in Tohoku was 1,066,000. 79,691 80,000 Compared to the previous year, 69,389 70,000 65,615 it was an increase of 46.9%, 60,000 exceeding that of the national 50,000 44,825 Japan in total rise of 14.8%. 40,000 33,496 27,509 26,314 30,000 18,416 ●By nationality, the number of 20,000 10,000 inbound overnight visitors from 1,200 Taiwan increased rapidly after 1065.6 1,000 Aomori the Great East Japan Earth- 260.3 Iwate quake, reaching 390,000, fol- 800 725.5 Miyagi 187.9 Akita 577.1 607.9 160.2 lowed by China with 160,000, 600 Yamagata a large increase of 87.6% com- 402.1 132.0 264.5 Fukushima 400 349.8 275.7 199.3 pared to the previous year. 210.0 104.7 200 67.0 117.9 88.2 78.9 130.3 ●In a comparison of Tohoku and 0 2010 2011 2012 2013 2014 2015 2016 2017 Hokkaido, consumption by in- (Note) For the period from January to March 2010, the number of visitors represents the number of ternational inbound visitors in those staying at accommodations with staff of 10 or more employees. 2015 shows an upward trend in Source: Statistics on Overnight Trips, Japan Tourism Agency Tohoku with 22.298 million yen, but is less than one-twelfth that of Hokkaido which has succeeded in attracting inter- national visitors to the area. Spending per capita in Tohoku was 48,474 yen, which is a decrease of 33.5% compared to the previous year, and is about 30% that of visitors to Hokkaido.

Changes in the Total Number of International Changes in Consumption Inbound Overnight Visitors by Nationality by International Inbound Tourists (1,000 people) (Million yen) (Yen/ per capita per visit) 450,000 300,000 180,000 Taiwan 278,282 396,740 400,000 146,233 250,000 150,000 350,000 124,241 125,517 119,363 121,742 300,000 200,000 120,000 248,410 172,210 250,000 150,000 90,000 200,000 180,360 China 160,180 150,000 127,490 100,000 72,856 60,000 60,850 94,610 85,400 100,000 45,202 45,212 48,474 39,280 50,000 38,561 30,000 50,000 21,857 22,298

0 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2011 2012 2013 2014 2015

Korea China Hong Kong Taiwan America Tourism consumption Tohoku Hokkaido Unit value of tourism consumption (right axis) Tohoku Hokkaido

(Note) The number of visitors represents the number of those staying at accommo- (Note 1) Tourism consumption refers to the total sum spent by inbound visitors dation facilities with staff of 10 or more employees. to the relevant prefecture(s). Source: Statistics on Overnight Trips, Japan Tourism Agency (Note 2) The unit value of tourism consumption refers to consumption per inbound visitor to the relevant prefecture(s) during a single visit. Source: Statistics on Inbound Tourists, Japan Tourism Agency

_ 24 _ _ 25 _ (15) Reconstruction Related Trends

The number of evacuees is decreasing, the problems of industrial restoration are diversifying and complicated.

●As of the end of FY2017, 96% and 89% of the plan for disaster public housing and private residential housing in Iwa- te, Miyagi and Fukushima prefectures were completed, and it is expected to be almost complete at the end of FY2018. ●The number of evacuees was more than 340 thousand people in March 2012, but due to housing development, it has decreased to 60 thousand as of July 2018.

Maintenance of Housing, The Number of Refugees Nationwide Residential Lots of the Affected 3 Prefectures (Persons) 400,000 70,000 (%) 100 100 96 99 344,345 59,573 100 350,000 60,000 98 99 100 313,329 5,710 90 84 300,000 89 50,000 4,740 80 263,958 250,000 225,177 11,211 70 40,000 57 70 200,000 60 170,841 30,000 50 150,000 45 119,163 40 100,000 20,000 37,912 31 71,365 30 22 50,000 10,000 20 8 0 10 0 1 5 2012 2013 2014 2015 2016 2017 2018 2018 0 1 March March March March March March March July 2012 2013 2014 2015 2016 2017 2018 2019 2020 (Year-end) Iwate Miyagi Fukushima Other Disaster public housing Residential area for private housing Source: Number of evacuees throughout the Nationwide (Note) Results as of the end of FY2017 and expected completion time Source: Infrastructure and Transport, Reconstruction Agency Ministry of Land

●The number of business establishments in 12 municipalities on the Iwate coast in the survey conducted in 2016 was 12,226 establishments (20.5% of the whole prefecture), which was 10.3% higher than the survey in 2012. The number of employees was 90,396 (17.3%, the same), which was an increase of 15.3%. In addition, the survey ratio of 2009 shows the decrease by 16.9% and 6.6% respectively. Also, the number of business establishments in 14 municipali- ties on the Miyagi coast in the survey conducted in 2016 was 24,136 establishments (23.7% of the whole prefecture), which was 8.4% higher than the survey in 2012. The number of employees was 214,880 (21.3%, the same), which was an increase of 12.5%. In addition, the survey ratio of 2009 shows the decrease by 20.7% and 11.7% respectively.

Changes in the Number of Establishments and Employees in Affected Areas The number of business establishments The number of employees

2009 2012 2016 2009 2012 2016 Compared Compared Prefecture (Persons) (Persons) (Persons) Compared Compared Prefecture to 2009 to 2012 proportion to 2009 to 2012 proportion (%) (%) (%) (%) (%) (%)

Iwate 64,293 59,537 59,451 ▲ 7.5 ▲ 0.1 _ 546,239 509,979 525,264 ▲ 3.8 3.0 _

12 municipalities 14,716 11,089 12,226 ▲ 16.9 10.3 20.5 96,767 78,410 90,396 ▲ 6.6 15.3 17.3

Miyagi 106,937 98,190 102,026 ▲ 4.6 3.9 _ 1,032,237 955,780 1,006,886 ▲ 2.5 5.3 _

14 municipalities 30,449 22,263 24,136 ▲ 20.7 8.4 23.7 243,351 191,077 214,880 ▲ 11.7 12.5 21.3

Fukushima 98,596 89,518 88,128 ▲ 10.6 ▲ 1.6 _ 872,919 782,816 806,130 ▲ 7.7 3.0 _

(Note 1) 12 municipalities in Iwate: Miyako City, Ofunato City, Kuji City, Rikuzentakata City, Kamaishi City, Otsuchi Town, Yamada Town, Iwaizumi Town, Tanohata Village, Fudai Village, Noda Village, Hirono Town (Note 2) 14 municipalities in Miyagi: Ishinomaki City, Shiogama City, City, Natori City, Tagajo City, City, Higashi City, Watari Town, Yamamoto Town, Matsushima Town, Town, Town, Onagawa Town, Town (Note 3) Fukushima prefecture excludes Naraha Town, Tomioka Town, Kawauchi Village, Okuma Town, Futaba Town, Namie Town, Katsurao Village, and Iitate Village. Source: Economic Census Basic Survey in 2009, Economic Census Activity Survey in 2012 and 2016

_ 25 _ ●Tenants of temporary facilities developed by Organization for Small and Medium Enterprise Infrastructure Develop- ment Organization due to the Great East Japan Earthquake is 1,353 companies (as of the end of March, 2018) , the fishery is the largest with 395 enterprises, followed by the construction and retail industries. ●Looking at the management issues of affected businesses in the questionnaire of the authorities, many businesses have problems in “securing and nurturing human resources” and “securing and developing sales channels.” In the fisheries and food processing industry, “rising raw material prices” and “development of new products and technologies” are the big problem compared to other industries. Changes in the number of Management Issues of companies’ tenants of temporary facilities (%) SMEs Group Subsidy Delivery Companies (Companies) 60.0 56.8 3,000 2,819 54.3 2,678 48.8 2,477 50.0 47.3 2,500 42.1 2,120 40.0 2,000 35.0 30.0 25.1 1,500 1,353 104 18.0 17.5 159 20.0 14.3 13.7 1,000 109 190 9.5 10.1 26 10.0 152 5.6 6.0 500 212 2.3 0.0 395 0 6 2014 2015 2016 2017 2018 Others Financing Securing and March March March March March Securing and and technologies Environmental measures Agriculture and Forestry Fisheries Construction Overseas expansion

Manufacturing Wholesale Retail training human resources developing sales channels Soaring raw material prices

Eating and drinking services Services (excl. Eating and drinking services) Others Development of new products Source: Small and Medium Enterprise Infrastructure All industries (n=5,912) Fisheries and food processing (n=486) Development Organization website Source: Tohoku Bureau of Economy, Trade and Industry, Questionnaire Survey of Supplier of SMEs Group Subsidies (conducted in June 2017) ●The output of Marine fisheries of disaster affiliated prefectures in 2017 (, Miyagi prefecture and Fukushima prefecture) is 294 thousand tons, which means that it is 66.8 if the year of 2010 is 100, 3.6 points lower than the previous year. The output of Marine Aquaculture of disaster affiliated prefectures in 2017 (Iwate prefecture and Miyagi prefecture) is 136 thousand tons, which means that it is 77.9 if the year of 2010 is 100, 5.9 points lower than the previous year. ●The major output of fishery processed goods in three disaster affiliated prefectures in 2016 consists of 230.7 thousand tons of Fresh frozen marine products, 39.9 thousand tons of kinds of Kamaboko (fishcake), 40.2 thousand tons of Fro- zen foods and 33.3 thousand tons of other edible processed goods.

Changes in the Output of Marine Fisheries and Changes in the Output of Aquaculture of Three Disaster Affiliated Prefectures Fishery Processed Goods (1,000 tons) (1,000 tons) (10,000 tons) 100.0 400 100 80 365.5 90 81.9 83.5 70 350 77.9 62.2 80 76.1 71.7 72.0 60 300 61.6 64.1 70 73.2 56.7 70.4 230.7 60 66.8 50 44.5 250 40.2 50 17.5 40 200 40.7 34.7 39.9 40 13.6 30 33.3 150 30 18.4 44 20 16.8 100 20 20.1 29.4 10 10 50 0 0 0 2010 2011 2012 2013 2014 2015 2016 2017 22 23 24 25 26 27 28年 The output of Marine fisheries of The output of Aquaculture of Kinds of Kamaboko Frozen foods Other edible processed goods three disaster affiliated prefectures disaster affiliated prefectures Salted foods Fresh frozen marine products (right axis) Marine fisheries in three afflicted Aquaculture fisheries in two afflicted prefectures compared to 2010 years prefectures compared to 2010 years (Note 1) Kinds of Kamaboko from 2010 to 2015 are excluding confidential Iwate prefecture. Source: Ministry of Agriculture, Forestry and Fisheries, Fishery and (Note 2) Salted foods in 2010, 2011 and 2013 are excluding confidential Aquaculture Production Statistics in 2017 Fukushima prefecture. Source:Tohoku Agricultural Bureau Pocket Northeast Agriculture, _ 26 _ Forestry and Fisheries _ 27 _ 3. Industrial Structure of Tohoku (1) Manufacturing industry ① Overview The value of manufactured goods shipped rose 1.4% year-over-year to 17,185 billion yen.

●The value of manufactured goods shipped in the Tohoku region in 2016 increased 1.4% from the previous year (to 17,185 billion yen), for the fifth consecutive year of growth. Its share of the national total also rose 0.2 points year- on-year, to 5.6%.

Changes in the Value of Manufactured Goods Shipped (Trillion yen) (%) 25 6.0 5.6 5.7 Share of national total (right axis) 5.6 5.5 5.5 5.5 5.3 5.4 5.4 5.0 20 18.9 5.0 18.4 17.0 1.7 1.6 16.3 16.8 16.8 Trillion yenAomori 15.8 2.6 15.2 1.6 1.7 1.8 2.5 14.7 1.5 15 14.3 1.5 4.0 1.5 1.5 2.3 2.4 Iwate 2.1 1.4 2.4 3.6 2.3 3.5 2.2 2.0 1.9 3.6 4.0 Miyagi 1.7 3.7 4.0 4.1 10 1.6 2.9 2.8 3.4 3.0 1.3 1.2 3.2 3.1 1.2 1.1 1.2 Akita 1.2 1.1 1.2 2.8 2.4 2.6 2.6 Yamagata 2.4 2.6 2.4 2.7 5 2.0

6.2 6.0 4.7 5.1 4.3 4.6 4.8 5.1 4.9 Fukushima 4.8 0 1.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source: Economic Census for Business Activity (four or more employees); Census of Manufacture (four or more employees)

●While the number of establishments in the manufacturing industry decreased in all prefectures of Tohoku, the number of employees increased in all of the prefectures. The value of manufactured goods shipped rose in all Tohoku prefec- tures except for Fukushima. The value added rose in all Tohoku prefectures except for Akita and Fukushima. The value of manufactured goods shipped was the highest ever in Aomori and Miyagi.

Manufacturing Industry Data by Prefecture

Value added (gross value added for Value of manufactured goods shipped No. of establishments No. of employees (Persons) establishments with 29 or fewer (Million yen) employees) (Million yen)

Y o Y 2016 2017 2016 2017 Y o Y 2015 2016 Y o Y Y o Y change change change 2015 2016 change Aomori 1,547 1,386 ▲ 10.4 55,122 57,283 3.9 1,702,308 1,807,044 6.2 633,700 652,564 3.0

Iwate 2,281 2,081 ▲ 8.8 84,546 85,282 0.9 2,366,978 2,371,678 0.2 654,685 671,065 2.5

Miyagi 2,928 2,618 ▲ 10.6 111,372 114,587 2.9 4,017,070 4,112,832 2.4 1,224,921 1,274,536 4.1

Akita 1,869 1,800 ▲ 3.7 59,539 61,695 3.6 1,224,139 1,235,285 0.9 480,201 476,111 ▲ 0.9

Yamgata 2,662 2,496 ▲ 6.2 96,471 98,974 2.6 2,550,977 2,663,410 4.4 843,008 929,781 10.3

Fukushima 3,971 3,620 ▲ 8.8 150,230 154,979 3.2 4,915,726 4,828,248 ▲ 1.8 1,618,257 1,530,486 ▲ 5.4

Tohoku 15,258 14,001 ▲ 8.2 557,280 572,800 2.8 16,777,198 17,018,497 1.4 5,454,772 5,534,543 1.5

Japan 217,601 191,339 ▲12.1 7,497,792 7,571,369 1.0 313,128,563 302,035,590 ▲ 3.5 98,028,029 97,232,364 ▲ 0.8

(Note) The number of establishments and the number of employees as of June 1. Source:Economic Census for Business Activity (four or more employees); Census of Manufacture (four or more employees)

_ 27 _ ② National Share by Industry Sector Electronic parts, devices, electronic circuits and information and communications electronics equipment had a relatively high share of the national total.

●Tohoku’s share of the value of manufactured goods shipped in Japan in 2016 was large for electronic parts, devices and electronic circuits (15.6%), and information and communications electronics equipment (14.8%), while it was small for transportation equipment (2.6%) and iron and steel (3.0%).

Tohoku’s Share of the Value of Manufactured Goods Shipped in Japan (2016) (%) 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0

Electronics 15.6 (13.3) Information 14.8 (13.6) Leather 14.3 (15.3) Lumber 11.6 (11.3) Business 9.2 (9.3) Ceramics 8.7 (9.0) Rubber 8.6 (7.8) Other 8.5 (6.7) Non-ferrous 8.3 (7.7) Paper/ pulp 8.0 (8.4) Food 7.2 (7.1) Furniture 6.3 (6.3) Textiles 5.8 (5.7) Production 5.5 (5.2) Metals 5.4 (5.3) Beverages 5.1 (4.9) Printing 4.6 (4.1) Electrical 4.5 (4.3) Petroleum 4.3 (3.5) Manufacturing Plastics 4.1 (3.9) Share of national total Chemicals 3.8 (3.7) 5.6% (5.4%) General-purpose 3.4 (3.2) Iron and steel 3.0 (2.7) Transportation 2.6 (2.6)

(Note) Four industries in 2016 (manufacture of leather tanning, leather products and fur skins / Manufacture of information and communications electronics equipment) are calculated by the total of five prefectures since the information as to Aomori is not disclosed. The figures in the brackets represent the share of the national total in 2015. Source:2015:Economic Census for Business Activity (four or more employees) ; 2016:Census of Manufacture (four or more employees)

Abbreviations for industry sectors in the above graph refer to the following:

Middle division of industrial Middle division of industrial Middle division of industrial Abbreviation Abbreviation Abbreviation classification classification classification Manufacture of petroleum and coal Manufacture of general-purpose General- Manufacture of food Food Petroleum products machinery purpose Manufacture of beverages, tobacco Manufacture of production Beverages Manufacture of plastic products Plastics Production and feed machinery Manufacture of business-oriented Manufacture of textile products Textiles Manufacture of rubber products Rubber Business machinery Manufacture of lumber and wood Manufacture of leather tanning, Manufacture of electronic parts, Lumber Leather Electronics products (except furniture) leather products and fur skins devices and electronic circuits Manufacture of furniture and Manufacture of ceramic, stone and Manufacture of electrical machinery, Furniture Ceramics Electrical fixtures clay products equipment and supplies Manufacture of pulp, paper and Manufacture of information and Paper/pulp Manufacture of iron and steel Iron and steel Information paper products communications electronics equipment Manufacture of non-ferrous Manufacture of transportation Printing and allied industries Printing Non-ferrous Transportation metals and products equipment Manufacture of chemical and allied Chemicals Manufacture of metal products Metals Other manufacturing Other products _ 28 _ _ 29 _ ③ Percentage Ratios by Industry Sector and by Prefecture The top shipping industry sectors in Tohoku are electronic parts, devices and electronic circuits, foodstuffs and transportation equipment.

●In 2016, six industry sectors out of 25 (electronic parts, devices and electronic circuits, foodstuffs, transportation equipment, chemical products, information and communications electronics equipment and production machinery) accounted for about 50% of the value of manufactured goods shipped in the Tohoku region. Change of Percentage of the Value of Manufactured Goods Shipped in Tohoku by Industry Sector 0 20 40 60 80 100 (%)

2008 14.4 10.7 7.4 5.3 11.6 4.8 4.5 4.5 4.3 3.7 3.3 3.7 21.8

2013 11.2 11.2 10.3 5.5 7.4 4.7 4.3 4.3 4.0 4.0 3.7 3.6 25.8

2014 11.4 11.0 9.3 5.5 7.8 5.4 4.3 4.4 4.3 3.8 3.7 3.5 25.6

2015 11.8 12.0 9.9 6.2 7.0 5.6 4.5 4.4 4.5 4.0 4.0 3.7 22.4

2016 13.3 12.0 10.1 6.0 5.9 5.9 4.6 4.3 4.3 3.9 3.7 3.4 22.6 Other Metals Business Ceramics Electrical Chemicals Foodstuffs Production Electronics Paper/ pulp Information Non-ferrous Transportation (Note) The industry of Manufacture of information and communications electronics equipment in 2016 is calculated by the total of fiveprefectures since the information as to Aomori is not disclosed. Source: Economic Census for Business Activity (four or more employees) ; Census of Manufacture (four or more employees)

●The industry sectors that have the largest share in each prefecture are as follows: Manufacture of food in Aomori, Manufacture of transportation equipment in Iwate, Manufacture of food in Miyagi, Manufacture of electronic parts, devices and electronic circuits in Akita and Yamagata and Manufacture of information and communications electron- ics equipment in Fukushima. Percentage of Industry Sectors in the Value of Manufactured Goods Shipped in the Six Tohoku Prefectures (2016) 0 20 40 60 80 100 (%)

Aomori 14.3 20.9 3.2 2.1 2.6 2.7 20.0 2.9 7.0 2.4 5.8 16.1

Iwate 9.0 15.4 23.8 3.1 2.1 8.6 4.9 0.9 2.1 3.9 4.3 1.9 20.0

Miyagi 13.5 13.6 13.0 1.8 2.3 7.1 4.7 1.7 3.0 1.6 3.3 4.5 29.9

Akita 27.8 8.5 5.0 6.3 1.0 6.4 5.3 4.1 2.4 6.4 3.6 3.5 19.7

Yamagata 17.5 12.0 4.9 10.1 9.3 9.0 3.7 1.7 5.5 1.9 3.1 0.8 20.5

Fukushima 8.9 6.4 7.5 10.2 12.3 2.8 5.3 3.9 6.9 5.0 4.5 3.9 22.4 Other Metals Business Ceramics Electrical Chemicals Foodstuffs Production Electronics Paper/ pulp Information Non-ferrous Transportation (Note) The following industry sectors make up only a small percentage in Tohoku compared to other regions and are therefore classified as "Other": They include "beverages, tobacco and feed", "petroleum and coal products", "plastic products", "iron and steel", "general-purpose machinery", "others", "lumber and wood products (except furniture)", "rubber products", "printing and allied industries", "textile products", "furniture and fixtures", "leather tanning, leather products and fur skins." As for , " information and communications electronics equipment" and " leather tanning, leather products and fur skins" are "others" since the information of Aomori is not disclosed. Source: Census of Manufacture (four or more employees) _ 29 _ ④ Shipment Value of Manufactured Goods in Major Industrial Sectors and Added Value Productivity by Region Five industries out of the top six exceed the shipment value of manufactured goods in 2010.

●For five of the top six industries, the shipment value of manufactured goods in the Tohoku region in 2016 exceeded that of 2010. Transportation equipment was on an upward trend, and information and communications electronics equipment was on a downward trend.

(Trillion yen) Change in Shipment Value of Manufactured Goods in Major Industrial Sectors 3.0

2.5 2.09 2.27 2.0 2.04 1.88 1.82 1.71 1.5 1.20

1.0 0.90 1.03 1.00 1.00 0.5 0.71 2008 2009 2010 2011 2012 2013 2014 2015 2016

Electronics Food Transportation Chemicals Information Production

(Note) The industry of Manufacture of information and communications electronics equipment in 2016 is calculated by the total of five prefectures since the infor- mation as to Aomori is not disclosed. Source: Economic Census for Business Activity (four or more employees) ; Census of Manufacture (four or more employees)

●The added value productivity in Tohoku region in the year of 2016 is 9.66 million yen/ person, and is 12.84 million yen/ person in Japan. This level is 75.2 for the whole country (= 100), which approaches 76.5 in 2010 before the earthquake (68.8 in 2011).

Added Value Productivity by Region (Manufacturing industry total) (10,000 persons) *The figure is 2016. 1,400 1,284

1,200 1,139 1,112 988 1,000 939 966 787 800 772

600

400

200

0 Aomori Iwate Miyagi Akita Yamagata Fukushima Tohoku Japan

2010 2016

(Note) Added value productivity is the added value per employee (10,000 yen/ person). The number of employees of added value productivity in the year of 2016 is based on the figures as of June 1, 2017. Source : Census of Manufacture (four or more employees)

_ 30 _ _ 31 _ ⑤ Industrial Property Rights The number of applications for industrial property rights increased for designs and trademarks.

●The number of applications for industrial property rights made in 2017 in the Tohoku region was 1,648 for patents, 142 for utility models, 314 for designs, and 2,535 for trademarks, with an increase in utility model, design and trade- mark applications, and a decrease in patent applications. ●The number of applications for patents and designs in 2017 rose while those for utility models and trademarks fell in comparison with the national level in 2011 when the application numbers fell off due to the Great East Japan Earth- quake. ●When compared with the number of applications by prefecture in the previous year, patent applications increased in Yamagata and Fukushima. The number of utility model applications increased in Aomori, Iwate and Miyagi and the number of design applications increased in Iwate, Miyagi and Fukushima and the number of trademark applications increased in Miyagi, Akita and Fukushima.

Changes in the Number of Changes in the Number of

(Applications) Patent Applications (%) (Applications) Utility Model Applications (%) 2,500 0.75 300 4.20 Share of the national total 0.68 0.66 0.65 Share of the national total 3.63 (right axis) 0.63 0.63 3.54 (right axis) 3.37 0.57 250 3.50 2,000 0.55 0.60 223 3.10 1,816 2.91 2.95 1,719 2.78 1,641 1,702 1,690 1,648 Aomori 1,575 Iwate 189 145 200 183 183 2.80 Aomori 140 176 1,500 142 137 0.45 Iwate Miyagi 137 142 150 2.10 8 9 1,000 732 687 0.30 8 16 Miyagi Akita 100 1.40 52 61 116 132 Yamagata 500 Akita 0.15 257 261 27 Yamagata 50 21 0.70 14 Fukushima 9 Fukushima 282 307 28 26 0 0.00 0 0.00 2011 2012 2013 2014 2015 2016 2017 2011 2012 2013 2014 2015 2016 2017

Changes in the Number of Changes in the Number of Design Applications Trademark Applications (Applications) (%) (Applications) (%) 500 1.75 3,000 2.40 1.60 2.23 Share of the national total 2.14 (right axis) Share of the national total 2.05 2.28 2,500 2,535 (right axis) 1.39 1.95 397 2,500 299 2.00 400 1.29 1.40 255 1.27 366 2,174 2,302 354 1.19 2,066 2,141 1.87 319 1.11 1.06 314 2,000 340 1.60 297 293 1.64 300 28 1.05 1,733 Aomori 264 43 33 Aomori 802 Iwate 23 1,500 Iwate 777 1.20 200 0.70 141 Miyagi Miyagi 109 1,000 241 296 0.80

16 9 Akita 340 100 Akita 0.35 376 500 Yamagata 0.40 Yamagata 65 63 467 523 Fukushima 37 40 Fukushima 0 0.00 0 0.00 2011 2012 2013 2014 2015 2016 2017 2011 2012 2013 2014 2015 2016 2017

Source: Japan Patent Office Annual Report, Japan Patent Office

_ 31 _ (2) Commerce ① Overview Although both wholesale and retail industries decreased the number of establishments and the number of employees, the annual commodity sales increased.

●In 2016, the total number of wholesale and retail business establishments in the Tohoku region was 107,899 (down 2.8% from the 2014 survey; the national figure also decreased 3.7% during the same period), while the number of employees was 765,337 (down 1.4% from the 2014 survey; down 0.2% for the nation during the same period). Total annual sales of goods stood at 28,916.2 billion yen (up 17.9% from the 2014 survey; the national figure rose 21.5% during the same period). Total annual sales refer to sales of goods for the calendar year immediately preceding the year of the survey. ●Although both wholesale and retail industries decreased the number of establishments and the number of employees, the annual commodity sales increased. Changes in the Number of Business Establishments, Number of Employees, and Annual Sales of Goods Annual sales of goods Number of Business Establishments Number of Employees (*Sales during the year immediately preceding the year of the survey) Share of Changes from Share of Changes from Share of Changes from the previous census the previous census the previous census national (Persons) national (Million yen) national total (%) total (%) total (%) (%) Tohoku Japan (%) Tohoku Japan (%) Tohoku Japan

2014 111,008 7.9 _ _ 776,029 6.7 _ _ 24,528,243 5.1 _ _ Commerce total 2016 107,899 8.0 ▲ 2.8 ▲ 3.7 765,337 6.6 ▲ 1.4 ▲ 0.2 28,916,184 5.0 17.9 21.5

2014 27,511 7.2 _ _ 220,524 5.6 _ _ 15,545,466 4.4 _ _ Wholesale trade 2016 26,654 7.3 ▲ 3.1 ▲ 4.6 217,845 5.5 ▲ 1.2 0.2 18,596,674 4.3 19.6 22.4

2014 83,497 8.1 _ _ 555,505 7.2 _ _ 8,982,777 7.4 _ _ Retail trade 2016 81,245 8.2 ▲ 2.7 ▲ 3.4 547,492 7.2 ▲ 1.4 ▲ 0.4 10,319,509 7.1 14.9 18.8

(Note1) The number of establishments and the number of employees were as of July 1, 2014 for 2014 and as of June 1, 2016 for 2016. (Note2) Changes from the previous census in the number of establishments, number of employees, and annual sales of goods are based on comparison between 2014 and 2016. Source : 2016 year Economic Census - Activity Survey Industry Total (Wholesale, Retail)

●For wholesalers the number of business establishments decreased from the previous survey in all prefectures, while total annual sales increased from the previous survey in all prefectures. For retailers, the number of business estab- lishments decreased from the previous survey in all prefectures, while total annual sales increased from the previous survey in all prefectures. 2016 Changes from Previous Census by Prefecture (Comparison with 2014) -10 0 10 20 30 (%) -10 0 10 20 30 (%) -3.1 -2.7 Tohoku -1.2 Tohoku 19.6 -1.4 14.9 -3.5 -3.4 Aomori -1.7 Aomori 8.5 -2.1 19.1 -2.1 -3.5 Iwate -2.6 Iwate 30.3 -3.9 12.7 -2.3 -0.8 Miyagi -1.1 Miyagi -1.1 20.4 22.8 -4.5 -3.5 Akita -3.9 Akita 20.9 -1.9 10.1 -3.9 -3.1 Yamagata 0.8 Yamagata 14.2 -3.3 4.9 -3.6 -2.9 Fukushima 0.0 Fukushima 1.9 20.4 12.5

No. of establishments No. of employees Annual sales of goods No. of establishments No. of employees Annual sales of goods

Source: 2016 year Economic Census -Activity Survey Industry Total (Wholesale, Retail)

_ 32 _ _ 33 _ (3) Service industry

The Gross Regional Domestic Product (GRDP) of service industry increased for four consecutive years.

●The GRDP for the service industry in Tohoku rose 2.4% in FY 2015 from the previous fiscal year to 197.293 billion yen. ●The share of the service industry for nominal GRDP in Tohoku decreased 1.2 points from the previous fiscal year (59.5%) to 58.3%, and the decline continues since FY 2009.

Changes in Gross Product of Service Industry (nominal) (Billion yen) (%) 300,000 65.0 62.8 61.6 62.0 61.9 59.7 60.5 60.7 59.7 59.5 60.0 250,000 58.3 55.0 199,301 199,734 191,929 189,414 192,762 197,293 200,000 187,129 182,113 186,945 189,804 27,356 50.0

150,000 26,604 45.5

54,463 40.0 100,000 21,911 35.0 50,000 22,630 30.0 44,329 0 25.0 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Aomori Iwate Miyagi Akita Yamagata Fukushima hare of Service Industry (right axis)

(Note) The service industry in this table shall be Electricity, gas, water and waste disposal business, Transport and postal services, Accommodations, eating and drinking services, Information and communications, Finance and insurance, Real estate, Professional and technical services, Business support services, Government service producers, Education, Public health and hygiene and social services (Medical, health care and welfare), Miscellan- ceous services. Source: Annual Report on Prefectural Accounts, Cabinet Office

●The 2016 Economic Census for Business Activity indicated that the number of employees (as of June 1, 2016) was 1.9 million persons; of this number, 25.7% worked in medical, healthcare and welfare industries, followed by the accom- modations, eating and drinking services (16.5%), and services (N.E.C.) (15.0%). ●Medical, healthcare and welfare industries have a larger share in the Tohoku region than the nation as a whole and the information and communications industry has a smaller share.

Percentage of Employees Engaged in Service Industries by Major Group Category (%) 0 100

1.9 million Tohoku 2.4 10.5 4.7 3.8 4.6 16.5 8.5 5.0 25.7 2.5 15.0 0.9 perosons

32.1 million Japan 5.1 10.0 4.8 4.6 5.7 16.7 7.5 5.7 23.0 1.5 14.8 0.6 persons

Electricity, gas, heat supply and water Information and communications Transport and postal activities Finance and insurance Real estate, and goods rental Scientific research, professional Accommodations, Living-related and personal services and leasing and technical services eating and drinking services and amusement services Education, learning support Medical, health care and welfare Compound services Services, N.E.C.

(Note) The service industries in this table refer to the major group categories of industries in the Japan Standard Industry Classification (revised in October 2013), from “Division F-Electricity, gas, heat supply and water” to “R-Services N.E.C.” The table excludes employees engaged in “I- Wholesale and retail trade.” Source: 2016 Economic Census for Business Activity, Statistics Bureau, Ministry of Internal Affairs and Communication

_ 33 _ (4) Agriculture, Forestry, and Fisheries

The output of the agriculture and the marine fisheries industry increased, while the output of the forestry industry decreased.

●The number for agricultural management in the Tohoku region in the year of 2015 was 251,519 entities (down 21.6% from the 2010 survey, down 18.7% from the whole country). Forestry management was 15,175 entities (down 42.9% from the 2010 survey, down 37.7% from the whole country). Fishery management in the Tohoku region in the year of 2013 was 11,308 entities (down 31.8% from the 2008 survey, down 18.0% from the whole country).

The number of agricultural, forestry and fishery management

Agriculture Forestry Fishery

Previous Previous 2008 2013 Previous 2010 2015 ratio (%) 2010 2015 ratio (%) ratio (%) Japan 1,726,751 1,404,488 ▲ 18.7 140,186 87,284 ▲ 37.7 115,196 94,507 ▲ 18.0

Tohoku 320,942 251,519 ▲ 21.6 26,569 15,175 ▲ 42.9 16,590 11,308 ▲ 31.8

Aomori 45,555 35,914 ▲ 21.2 3,071 2,059 ▲ 33.0 5,146 4,501 ▲ 12.5

Iwate 59,301 46,993 ▲ 20.8 8,795 4,979 ▲ 43.4 5,313 3,365 ▲ 36.7

Miyagi 51,410 38,872 ▲ 24.4 2,129 1,373 ▲ 35.5 4,006 2,311 ▲ 42.3

Akita 50,215 38,957 ▲ 22.4 4,894 2,726 ▲ 44.3 966 758 ▲ 21.5

Yamagata 41,857 33,820 ▲ 19.2 2,751 1,317 ▲ 52.1 416 359 ▲ 13.7

Fukushima 72,604 53,157 ▲ 26.8 4,929 2,721 ▲ 44.8 743 14 ▲ 98.1

Source: Agriculture and Forestry Census (as of February 1 each year), Fishery Census (As of November 1 each year)

●The amount of agricultural output in the Tohoku region in the year of 2016 is 1,388.5 billion yen, which accounts for 14.92% of agricultural output nationwide of 9,305.1 billion yen, 0.06 points higher than the previous year. By item, the amount of livestock products is the largest at 449.4 billion yen, accounting for 32.4% of the Tohoku region’s agricultural output, followed by rice at 412.9 billion yen and 29.7%.

Trend of Agricultural Output and Nationwide Ratio Breakdown of the Output of (Trillion yen) (%) the Agricultural Industry 20,000 18.0 Other 1.6% 18,000 15.17 15.06 15.44 15.27 16.2 14.59 14.86 14.92 16,000 14.4 13,885 14,000 13,296 13,092 13,169 223 12.6 12,526 12,571 12,298 Rice 12,000 10.8 4,494 29.7% Livestock 10,000 134 9.0 products 264 32.4% Tohoku 8,000 2,022 7.2 1,388.5 billion yen (2016) 6,000 2,619 5.4 4,000 3.6

2,000 4,129 1.8 Industrial Vegetables crops Fruits 18.9% 0 0.0 1.0% 14.6% 2010 2011 2012 2013 2014 2015 2016 Flowering plants Rice Vegetables Fruits Flowering plants 1.9% Industrial crops Livestock Other Nationwide ratio (right axis)

Source: Tohoku Agricultural Bureau Pocket Statistics of Northeast Agriculture, Forestry and Fisheries

_ 34 _ _ 35 _ ●The amount of forestry output in the Tohoku region in the year of 2016 is 69.65 billion yen, which accounts for 15.8% of forestry output nationwide of 440.48 billion yen, 1.6 points lower than the previous year. By item, lumber produc- tion was 45.65 billion yen, accounting for 65.9% of agricultural output in Tohoku region. Cultivated fungi production is 22.85 billion yen, which is 33.0%.

Changes in the Output of the Forestry Industry Breakdown of the Output of and Share of the National Total the Forestry Industry (100 million yen) (%) 1,200 20.0 Other 0.1% 17.1 17.4 18.0 16.4 16.2 1,000 15.5 15.8 14.6 16.0 14.0 800 767.3 753.0 692.8 682.5 696.5 0.4 12.0 Cultivated 606.8 602.6 fungi 600 228.5 10.0 production 33.0% Tohoku 7.3 8.0 69.65 billion yen 400 (2016) 6.0 Lumber 456.5 4.0 production 200 65.9% 2.0 Firewood coal production 0 0.0 2010 2011 2012 2013 2014 2015 2016 1.1%

Lumber production Firewood coal production Other Cultivated fungi production Nationwide ratio (right axis)

Source: Tohoku Agricultural Bureau Pocket Statistics of Northeast Agriculture, Forestry and Fisheries

●The output of marine fisheries and marine aquaculture in the Tohoku region in 2016 was 194.2 billion yen, which ac- counts for 13.2% of the output nationwide, 1.0 points higher than the previous year. By the type of business, marine fisheries is 132.8 billion yen, and marine aquaculture is 58.4 billion yen. ●The production volume of marine fisheries in the Tohoku region in 2016 is 415,000 tons, which is the second consecu- tive year’s decline. The proportion of the Tohoku region’s production nationwide was 12.7%, decreased by 0.1 points from the previous year.

Changes in the Output of the Marine Fisheries and Marine Aquaculture The Output of the Marine Fisheries and Share of the National Total (100 million yen) (%) (100 tons) (%) 2,500 16.0 800 16.0 14.2 13.6 13.2 14.0 700 13.2 14.0 12.7 12.8 12.7 2,000 1907 12.2 11.5 12.0 600 585 11.4 12.0 1,942 10.5 10.1 10.2 1,803 491 9.5 1,623 584 10.0 500 473 10.0 1,500 448 1342 1,379 427 1266 400 415 8.0 400 8.0 1,000 6.0 300 6.0

1,328 4.0 200 4.0 500 2.0 100 2.0

0 0.0 0 0.0 2010 2011 2012 2013 2014 2015 2016 2010 2011 2012 2013 2014 2015 2016

Marine fisheries Aquaculture Nationwide ratio (right axis) Marine fisheries Nationwide ratio (right axis)

(Note) 2013 was calculated with the amount excluding and Fukushima prefecture since aquaculture output value is kept secret. 2014 was calculated with the amount excluding Yamagata prefecture since aquaculture output value is kept secret. 2015 was calculated with the amount excluding Yamagata prefecture since aquaculture output value is kept secret. 2016 was calculated with the amount excluding Yamagata prefecture since marine fisheries and aquaculture output value were kept secret. Source: Tohoku Agricultural Bureau Pocket Statistics of Northeast Agriculture, Forestry and Fisheries

_ 35 _ ECONOMIC OVERVIEW OF TOHOKU REGION 2018

Tohoku Bureau of Economy, Trade and Industry