Japan’s total investment in construction will slump to 56.67 trillion yen in fiscal 2002, down 6.2 percent from the previous year, and slip below the 60 trillion yen level for the first time in 16 years, a state-affiliated research institute forecast Wednesday.
The Research Institute of Construction and Economy also drew a bleak picture for fiscal 2003, predicting that the construction market will shrink 4.9 percent to 53.87 trillion yen.
For fiscal 2002, which ends March 31, 2003, debt-burdened central and local governments have reduced their budgets for public works by 9.4 percent to 24.96 trillion yen, the institute said.
Meanwhile, private-sector housing investment will see a 4.6 percent year-on-year drop to 17.52 trillion yen, falling for the third consecutive year.
Private nonhousing investment will also fall, by 2.1 percent, to 14.2 trillion yen, it said, citing weak consumer confidence and the prolonged economic slump.
For fiscal 2003, the institute predicted that the public works budget would see another year-on-year drop, in excess of 9 percent, assuming no extra budget is compiled to boost the economy.
Private-sector housing investment will also shrink, by a further 1.9 percent, to 17.19 trillion yen because special tax breaks on housing loans will expire at the end of the current fiscal year, the institute said.