Land ministry overstated construction orders data for years, potentially inflating Japan's GDP

Dec 16, 2021 | News On Japan

Dec 16, 2021 (Japan Times) - The government overstated construction orders data for years, Prime Minister Fumio Kishida admitted Wednesday, in a practice that may have inflated the country's gross domestic product.

The revelation was first reported by the daily Asahi Shimbun, which said the land ministry had been "rewriting" data received monthly from about 12,000 select companies since 2013, at a pace of about 10,000 entries per year.

“It is extremely regrettable, and we need to figure out why it happened and how to prevent a recurrence. That’s a must,” Kishida said during a Lower House Budget Committee session.

Construction companies are obliged to report the number of construction orders they receive every month to prefectural governments, which then compile the data and submit it to the land ministry.

But when construction companies that are late turning in their data submitted figures for the past several months in bulk, rather than reporting figures one month at a time, the ministry had been instructing prefectures to revise the data to make it look like it was all reported in the latest month.

At the same time, if a construction company did not report its orders immediately for the latest month, the ministry compiled an estimate for the company based on the average number of orders received industrywide. The estimate would then be included in the overall construction orders data, leading to an overlap that would inflate figures. The practice had been in place since fiscal 2013, which began in April of that year.

Source: ANNnewsCH

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