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Squeaky tight budgets impacting government construction spending

Date Posted: 2005-11-04

The Japanese government’s Trinity Plan implementation, coupled with the trickle down within local government budgets, is hurting construction projects.

The Civil Credit Investigation Company says construction sales have dropped 4.4% in 2004, the worst it has been in ten years. The Okinawa Branch office says research on Construction Company Rankings and Sales show sales fell Y341,400,000,000.

Public construction had dipped as prefecture governments are finding themselves with limited budgets. Okinawa’s governor and big city mayors are finding there’s no money in the coffers to reach out with new spending projects. In fact, many towns and cities are merging to cut costs, and larger cities are finding themselves strapped for cash to even pay for essential services. In Naha City, for example, preschools are being privatized to save taxpayer money.

Companies are calling it a “serious problem” because construction is a highly specialized and competitive business. Without public construction work on their plates, companies are having to scale back staffs.

The top 10 construction companies report their sales dropped 13.4% from 2003 figures. The top company, Kokuba-gumi, has led the pack for more than 20 years, “always getting jobs” from government agencies. Their efforts for 2004 netted only a waste disposal construction project.

The number two company, OkiDenkou Company, says they’ve only one job, an electronics company job. Third ranking Kanehide Construction reports little action, as does number 4 Nakamoto Kougyo and fifth ranking Oshiro-gumi.

Daiyone Construction company tumbled from the number three ranking a year ago to number seven. Mikio Shimoji, newly elected to office as an independent after bolting the Liberal Democratic Party a year ago, says people aren’t starting jobs much now, and those that do are not aiming any business his way.

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