Consumption Activity Index

Real consumption activity index falls by 0.6% MoM in May 2017.

Published monthly by the BoJ. Updated till the month of May 2017. (Published on July 7th, 2017)

Recent Data Trend

In May 2017, the real consumption activity index(RCAI) fell by 0.6% month on month(MoM), from 105.6 in April to 105.0 in May. By components, real durable goods index fell by 1.1% MoM, non durable goods index fell by 0.4% MoM and real services index fell by 0.6% MoM.    In our view, the decline in May should not be alarming. Real consumption activities in Japan has been steady growing in the first 4 months of 2017, including the robust 1.4% growth in April. Despite the decline in May, the average of April-May is 1% higher than the average of January-March. Unless the consumption activity falls off in June, it is likely that we will see a positive growth in the April-June quarter of 2017.  As the private consumption accounts for 60% of the economy, it means that there is a strong likelihood that the Japanese economy kept growing positively in the April-June quarter.  

Brief overview

The Consumption Activity Index (CAI) is published by the Bank of Japan on a monthly and quarterly basis as a measure of short term consumption activity of the households in the economy. The data is available in both nominal and real terms. The real CAI has three sub categories namely- Durable Goods Index, Non-durable Goods Index and Services Index. A variant of the Consumption Activity Index is “Consumption Activity Index Plus" that contains statistics on digital contents delivery services that have been growing since the end of the last decade. Another variant Consumption Activity Index (adjusting travel balance) excludes the consumption by foreign visitors that causes an upsurge in total spending and does not reflect the true spending pattern of the Japanese consumers.

The supply and sales side statistics used by the CAI are the same as that used for Private Consumption in the National Accounts statistics. The correlation coefficient between two indicators is quite high too. So, it can be assumed that CAI will be similar to Private Consumption in the National Accounts. The CAI has shown that private consumption in Japan has enjoyed a moderate recovery and expansion after the Great Recession between 2008-2009, but since 2014, we observe a stagnation in the consumption activities.

For more information visit the official government page

Consumption Activity Index(Quarterly)

Next Release Date: August 7th, 2017.

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