Niigata business sentiment reaches 35-year high

Business sentiment in Niigata Prefecture has reached its highest level in approximately 35 years. According to the short-term economic survey released by the Bank of Japan Niigata Branch, the Diffusion Index (DI) for all industries rose to +17 in September, marking the highest level since August 1991.

Key drivers for this improvement include increased demand related to AI and semiconductors, as well as improved profitability through price pass-through and price hikes. Additionally, the easing of procurement difficulties following Middle East tensions has contributed to the positive trend.

Despite the current improvement, outlooks remain cautious. The forecast DI stands at +8, with businesses expressing concerns regarding geopolitical uncertainty in the Middle East, potential impacts on procurement costs, and the effects of rising prices and interest rates. The Bank of Japan Niigata Branch maintained its baseline assessment that the local economy is “recovering while being affected by high raw material costs” for the 25th consecutive month.