On October 3rd, NX Research Institute announced its revised outlook for the economy and freight transport in fiscal year 2025.
According to the report, the Japanese economy is projected to grow at a rate of 0.5% compared to the previous quarter (2.2% annualized) on a seasonally adjusted basis for the April-June 2025 quarter, marking five consecutive quarters of positive growth. Domestic private demand remains strong, with personal consumption increasing by 0.4%, housing investment by 0.5%, and capital investment by 0.6%. Government consumption is slightly up, but public investment is sluggish. Exports are up a substantial 2.0%, and imports, a deduction item, are only increasing by 0.6%, resulting in a positive contribution from external demand.
The outlook for freight transport indicates that domestic freight transport is projected to decrease by 2.3% for the full fiscal year 2025, marking the fourth consecutive year of decline. The trend in fiscal year 2025 is expected to remain below zero, with a 3.5% decrease in the first half and a 1.1% decrease in the second half. The 2.3% decrease for the full year represents a larger decline than the 1.4% decrease in the previous year, and for general cargo alone, the figure is projected to decrease by 1.6%, a reversal from the 1.3% increase in the previous year.
In terms of transport volume by product category (FY2025), consumer-related cargo fell by 1.3% for the full year, the first time in three years, due to sluggish growth in real disposable income, a slowdown in consumer spending due to soaring consumer prices, and a rebound from the significant increase in FY2024. While a small increase was maintained in the first half of the year, a significant decline is unavoidable in the second half.
While demand for production-related goods surged in the first quarter following the US Trump administration's tariff policies, it is expected to remain below market level thereafter due to downward pressure from factors such as sluggish industrial production. Overall, the decline was 1.9%, a larger decrease than the previous year (0.6% decrease).
Construction-related cargo saw a 3.1% decrease overall, marking the third consecutive year of declines. This was due to the continued lack of expected growth in public investment, coupled with sluggish housing investment stemming from factors such as a decline in demand following the surge in energy-saving campaigns and expectations of higher interest rates, making a decrease in new housing starts unavoidable.
Looking at transportation volume by mode of transport (FY2025), JR container transport saw a significant increase of 5.0%. Transportation of excavated soil (eco-related materials) from the construction of the Chuo Shinkansen maglev line contributed greatly from October 2024, resulting in a 2.5% increase for JR as a whole. On the other hand, JR freight transport was sluggish in the first half of the year, down 1.6% due to factors such as weak petroleum prices. In the second half, it declined further to 4.1% due to factors such as the rebound effect from the accelerated cement shipments that occurred in the previous year, resulting in a negative figure of 2.9% for the full year.
The private automobile sector saw a significant decline, largely due to construction-related sectors. Although the decline narrowed in the second half, the overall figure remained sluggish at a 4.2% decrease.
Domestic shipping saw a decline of approximately 3% in production-related cargo due to weak demand for petroleum products, steel, and chemical products. Construction-related cargo also fell by nearly 2%, resulting in an overall decrease of 2.6%.
Domestic air travel is projected to increase by 6.7%. While the boost from the launch of dedicated cargo flights by major courier companies in April 2024 continues, the positive impact is gradually diminishing.
