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Building Products

＜＜Revision of Japanese Building Standards Law＞＞
Advisory to U.S. exporters of building products to Japan

TRADE EVENTS

Japan Home & Building Show in Tokyo (11/12 – 14, 2008)

REPORT HIGHLIGHTS

(for full report, please access our Market Research Library )

Housing Starts and Imports of Building Products
The Japanese Ministry of Land, Infrastructure and Transport (MLIT) announced Japan's total housing starts for June 2008 at a level of 100,929 units, a 16.7% decrease compared to June 2007.  Year on year starts of single-family and multi-family dwellings decreased 7.4% to 40,735 units and 26.5% to 51,140 units, respectively, while row houses increased 18.9% to 9,054 units.  Year on year 2x4 housing starts increased by 5.9% to 9,744 units, while prefabricated housing starts decreased by 11.5% to 13,277 units.  Seasonally adjusted housing starts on an annual basis increased 5.4% to 1,129,740 units in June 2008, as compared to May 2008.

Total imports of building products to Japan for the five-month period from January to May 2008 decreased 28.7% to 496.7 billion yen (about US$4,540 billion at 109.40 yen/US$), compared to 696.5 billion yen (about US$5.91 billion at 117.76 yen/US$) for the same period in 2007.  Imports from the United States decreased 30.1% to 34.2 billion yen (US$312.3 million) from January to May 2008, compared to 48.9 billion yen (US$415.0 million) in the same period in 2007.

Japanese Residential Building Products Industry
The Japanese housing industry suffered an unprecedented setback in 2007 in terms of numbers of newly built homes.  This was largely due to the revision of the Building Standards Law (effective in June 2007), which greatly slowed the Building Permit Application process.  The sharp downturn of Japan’s housing starts was notable in the second half of 2007 – on monthly basis a 30-40% decrease, compared to the same month of the previous year. 
As a result, annual housing starts in Japan totaled 1.1 million in 2007; the number still equates to the world’s second largest housing market among developed countries, behind the United States. CS Japan estimates the size of the total building products market, including both residential and commercial building products, at about 11.6 trillion yen (US$ 98.7 billion) in 2007. The total imports of building products were1.5 trillion yen (US$ 12.9 billion) in 2007, with imports from the Untied States accounting for 104.6 billion yen (US$ 888.3 million) of this total.  Due in large part to a recovery from the sharp fall of housing starts caused by confusion over the newly applied Building Standard Law, the building products market is expected to see some growth in 2008.
Many high-end U.S. residential building products have good market prospects. As the Government of Japan launched its “200-year residence” plan in 2007 to deal with ageing society, high quality U.S. building products such as doors and wood windows are expected to do well in the Japanese market. To realize the “sustainable society” concept nested in the 200-year residence plan, eco-friendly and health conscious building products have also good potential in Japan.  However, it is important to note that imported residential building products are still niche market products in Japan, and so for U.S. manufacturers who do business in Japan for the first time, the initial sales may be small.  U.S. companies may want to consider selling their products through trading companies or U.S. export consolidators. It is then prudent to develop a relationship with a Japanese agent or distributor, once the product is proven to be successful.

UPCOMING REPORT

Housing Starts in Japan – July 2008 (late September 2008)
Imports of Building Products to Japan – June 2008 (late September 2008)

USEFUL LINKS

Residential Building Products

CS JAPAN CONTACTS

Unit Chief: Pat Cassidy
Residential Building Products: Takahiko Suzuki