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February 1st, 2011
Research and Markets: Japan Infrastructure Report Q1 2011

The long standing decline in Japan’s construction industry seems to have finally reversed in 2010, with BMI forecasting Japan’s construction industry value to grow at 1.4% year-on-year (y-o-y) compared to 2009 in real terms. However, this positive growth in construction industry value is mainly due to base effects and a mild improvement in Japan’s economic situation in 2010. Therefore, risks remain to the downside, especially in light of the limited activity seen over the first three quarters of 2010, the weak economic growth expected over the next few years and BMI’s bearish macro forecasts for the US, eurozone and China, with the latter an especially threatening contagion to Japan. Our forecast for Japan’s construction industry forecast over the medium term (2011-2015) reflects this bearish outlook, seeing only a weak annual average growth of 1.2% over the forecast period.

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