Japanese and Korean economic and housing updateFriday 4 Apr 2014 Japan’s economyJapan’s economy closed out 2013 on a fragile upwards growth trajectory. Annual GDP advanced 1.6% in 2013. However fourth quarter GDP results fell to a 0.9% annualized rate. Weaker than expected consumer demand as well as declining capital investment are cited as the factors for the slowing growth rate late in 2013. There are concerns that the introduction of the consumption tax increase in April may stall growth starting in Q2 2014. Progress is evident with the Abe government’s objective of ending Japan’s deflationary spiral. Year over year consumer prices edged up 1.3% in December and wholesale prices were up 2.4% in January. The government described prices as “rising moderately” for the first time since 2008. Exports surged 15.3% in December and 9.5% in January, however, the increase failed to keep the pace with rising imports. Imports jumped 25% in January: leading to a record monthly trade deficit of $27.2 billion. Japan’s Housing Starts Total December housing starts surged 18% to finish at 89,578 units. The December results marked a 16th consecutive monthly gain. Total housing starts for 2013 finished at 979,683 units: an 11% gain over year prior results. Total wooden starts increased 13% to 549,971 units. Post and beam starts increased by just under 49,000 units to finish at 412,892. Wooden pre-fab was up by 11.8% to 16,968. Platform frame starts posted a record high of 120,111 units: besting the previous high in 2008 by 12,400 units. As a percentage of total starts, wood frame construction was up 1.0% to 56.1%. South Korean economy South Korea’s exports edged down 0.2% on-year to US$45.58 billion in January, with imports dropping 0.9% to $44.85 billion posting a trade surplus of $735 million. Household income grew 2.1% on-year in 2013 on improved labour market conditions that led to more employment. In order for South Korean economy to make a leap forward, the south Korean government is preparing the three-year economic innovation plan which aims to raise the country’s growth potential to 4%, hike the overall employment rate to 70% and increase the annual per-capita income level to $40,000. South Korea’s housing starts With a prolonged slump in housing and real estate market since 2008, Korea’s housing starts in 2013 decreased 3.4% to 83,744 buildings from a year earlier 86,683 buildings. The number of wood building permits and wood building starts in 2013 decreased 1.0% to 11,710 and 0.3% to 10,339 respectively compared with those in 2012. On a permanent reduction of acquisition tax and an outlook of improving real estate market conditions, housing transactions in South Korea more than doubled in January from a year earlier indicating a recovery in the local property market. Source: Canada Wood |
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