Japan – what can we learn? - Construction Labour Research

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2005 the revision of the Fair Trade Act at last imposed chargesystems. Before that revision, bid collusion, which is an illegal pricedeciding agreement system, was practically allowed on the grounds ofa soft landing of large construction companies facing long recession.Thanks to this system, large general contractors recovered theirfinancial condition. However, the preserved habit of extra productionand intensive competition still exist as conventional customs in theconstruction market. The industry still struggles to balance betweencompetition and coexistence with medium and small size enterprises.The establishment of fair competition is just beginning. There areseveral changes in the spheres of national and local investment,shrinking public orders, recovery of business investment in the privatesector, and expected increasing overseas investment and so on.2. Shrinkage of the construction market in JapanFigure1 Investm ent in construction9080trillion yen7060504020.822.623.424.325.7 28.7 32.334.233.3 35.234.6333431.93028.225.9 23.5 20.519.9 18.2PublicPrivate302032.838.9 43.3 48.8 55.7 53.7 51.6 47.5 45.5 43.848.242.237.4 36.6 36.233.1 30.9 30.2 32 33.6 34.81001986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006yearThere are four stages in the transformation of the construction market(See Figure 1).- The first stage started after the late 1980s when the Plaza Accordtolerated the high value of the yen, promoted the policy of expandingdomestic demand that enlarged public and private markets, andaccelerated the economic bubble. Recognising the increasing rate ofthe yen, the government responded to large companies’ request formaintaining export competitiveness. The enterprises leading exportCLR News No 2/200619
policy were Toyota, Nissan, Canon, Matsushita, etc. Due to theconfusion of the trade cycle and structural change, the economicpolicy resulted in a monetary easing, massive influx of exportingexpenses into the domestic market, and expansion of financialexpenditure. These conditions caused the rise in land values as well asstock prices, and ended up with the economic bubble. Theconstruction industry also enjoyed a huge amount of orders thanks tothe boom in the core industries. During these five years (from1986 to1991), construction investment increased by 53.7 percent, from 53.6trillion to 82.4 trillion. 1992 marked the investment peak, with thebeginning of the collapse of the bubble economy.- The second stage ran from 1992 to 1998. Private investment beganto decrease in 1992. It had continuously been downscaling for fouryears until 1995. In 1996, it showed a slight reverse, but it againturned to a decrease from 1997 to 2004. This long cutback in privateinvestment caused the recession with a breakdown in land and stockspeculation, and a banking crisis. In order to handle these problems,public investment showed the opposite trend during this period. Thegovernment poured in large amounts of financial funds, up to 35trillion yen, as a conventional practice for any economic recoverypolicy. This policy was not simply meant as a measure to boost theeconomy. It was grounded in a treaty with the U.S., the decade-longsocial investment plan that amounted to 630 trillion yen. This policyformed the largest construction market in Japanese history (84 trillionyen in 1992). The economic policy of that period inherited theprevious deviation to large companies. When interpreted favourably,the government was afraid of an economic crash, that if it economisedin terms of construction investment, the banking institutes related toZaibatsu would get into trouble with bad debt and uncollectible loansfor construction projects. As those banking institutes also take the roleof a central nervous system for large companies, government fearedscale expansion as a financial remedy. The treaty with the U.S.provided the legitimate basis for enlarging investment.- The third stage is from 1999 to 2004. From 1999 public investmentfinally began to decrease along with private investment. It was thebeginning of full-scale reduction in the market. Compared to the peakof 84.0 trillion in 1992, investment was cut back to 53.2 trillion, andCLR News No 2/200620
Page 1 and 2: No 2/2006Japan - what can we learn?
Page 3 and 4: separate nation states, local build
Page 6: "shortening of exploitation's horiz
Page 10 and 11: The Japanese construction industry
Page 12 and 13: time could be up to 50 or more hour
Page 14 and 15: The differences between sites in th
Page 16 and 17: most of its importance since then.
Page 18: But asked, who decides on the wages
Page 23 and 24: Figure 2 C om position of Investm e
Page 25 and 26: 3.2 Investment sheetSecondary, the
Page 27 and 28: Maintenance and repairN ew construc
Page 29 and 30: period of continuous cut back of or
Page 31 and 32: enterprises, such as Nippon Steel C
Page 33 and 34: of architectural design, engineerin
Page 35 and 36: is constructed without blueprints.
Page 37 and 38: task over again bearing the cost of
Page 39 and 40: outsource every production function
Page 41 and 42: so that any significant changeover
Page 43 and 44: sixties or seventies who have retir
Page 45 and 46: Immigration law allows residential
Page 47 and 48: Today, domestic construction demand
Page 49 and 50: 1993. Then there was a decrease to
Page 51 and 52: Hundredmillion 億円yen1400012000
Page 53 and 54: workers belong to enterprise-based
Page 55 and 56: trans-enterprise or industrial nego
Page 57 and 58: Union (DENKI RENGO), Confederation
Page 59 and 60: unions on their part have advocated
Page 61 and 62: again. Industry specific federation
Page 63 and 64: consult, while involved with variou
Page 65 and 66: that unions can bring many positive
Page 67 and 68: Figure 1. The Image of the J-CorpCo
Page 69 and 70:
References:OKAMOTO, Hideaki(1964) "
Page 71 and 72:
Nr. 3. Stress in the European const
Page 73 and 74:
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