The Bank of Japan Kanazawa Branch published the Ishikawa Prefecture Financial and Economic Quarterly for Summer 2025, providing a comprehensive analysis of reconstruction demand from the Noto Peninsula earthquake and the prefecture's economic recovery status.
The report assesses that Ishikawa Prefecture's economy is recovering moderately despite some weak movements in certain areas. Reconstruction demand from the Noto Peninsula earthquake is significantly boosting public and housing investment. Personal consumption is recovering despite the impact of price increases, and capital investment maintains a moderate increasing trend. Production shows weak movements, with clear differences in recovery levels between industries.
Reconstruction-related investment has increased substantially. Public works contract amounts surged 126.1% year-on-year in April and 56.3% in May. Reconstruction-related construction has begun in earnest, with infrastructure restoration and disaster prevention reinforcement projects being particularly active. Housing investment is also recovering due to reconstruction demand, with new housing starts up 11.7% year-on-year in April. The construction industry is focusing on responding to reconstruction demand amid labor shortages and high material prices. The influx of construction companies and workers from outside the prefecture is creating ripple effects on the regional economy.
Personal consumption is recovering with inbound effects becoming evident. Department store and supermarket sales increased 2.4% year-on-year in April, remaining solid despite price increase impacts. Rising inbound demand and new store opening effects support sales. Automobile sales recovered 15.1% year-on-year in April and 8.4% in May. Home appliance sales remain within a sideways range, with replacement demand having run its course and cautious attitudes toward high-priced items. Tourism's strong movements have paused, with lingering earthquake effects and the completion of Hokuriku Shinkansen effects.
Production activities show inter-industry disparities. The chemical industry is gradually increasing, with pharmaceuticals and cosmetics-related sectors performing well. The textile industry is recovering, with the shift to high value-added products proving successful. General-purpose, production, and business machinery are bottoming out, with signs of order bottoming. Electrical machinery shows weak movements as semiconductor-related inventory adjustments continue. Traditional craft industries are gradually recovering from earthquake impacts, showing high correlation with tourism demand.
The employment, income, and price environment is gradually improving, with the job opening ratio maintaining a high level of 1.66 in April. Employee income exceeds the previous year, with rising construction industry wages due to reconstruction demand contributing. Consumer prices in Kanazawa City excluding fresh food rose 3.9% year-on-year in April and 3.8% in May. In addition to energy and food price increases, service prices are also on an upward trend. While corporate price pass-through is progressing, tourism-related industries struggle with price setting.
Financial conditions and corporate trends show deposits exceeding the previous year for corporations, individuals, and public funds, with reconstruction-related fund inflows also contributing. Loans also exceed the previous year, led by reconstruction and capital investment funding demand. While the number of corporate bankruptcies remains at previous year levels, total liabilities have increased due to mid-sized company failures. Regional financial institutions are actively providing reconstruction support financing while strengthening management improvement support. The sustainability of reconstruction demand and smooth transition to normal demand remain future challenges.
The report points out that Ishikawa Prefecture's economy is showing a unique recovery pattern due to reconstruction demand from the Noto Peninsula earthquake, emphasizing the importance of strengthening industrial structure to maintain a sustainable growth trajectory even after reconstruction demand subsides.