in the October-December period of 2011 decreased 0.6 percent from the previous quarter, or an annualized 2.3 percent — the first dip in two quarters. This shows that the Japanese economy, which had been on a path of slow recovery after having been hit by the March 11 disasters and the Fukushima nuclear crisis, is now at a standstill.
The 2011 annual GDP in real terms dropped 0.9 percent — the first negative growth in two years — mainly because exports were stagnant due to the severe damage to supply chains caused by the March 11 disasters and floods in Thailand.
There are views that the Japanese economy in the January-March period for fiscal 2011 will grow more than 1 percent due to greater demand related to reconstruction from the March 11 disasters and expansion of consumer spending.
Reconstruction-related projects costing the nation ¥18 trillion are now in full swing and stimulating economic activity, but, unfortunately, no optimism is warranted. In the disaster-hit areas in the Tohoku region, business enterprises that are striving to revive their operations may find it difficult to secure the human resources they need because public-works projects are utilizing much of the available local manpower for reconstruction efforts.