The energy crisis has certainly amplified activity and recruitment intensity in utilities and mining sectors, which are now the sectors facing the most difficulties. Furthermore, service activities are more affected by these headwinds than the manufacturing sector, which can, to a certain extent, substitute part of the missing workforce with automation.
That said, the main factor that explains these recruitment difficulties remains the demographic crisis facing Japan. Around a third of Japanese people are now aged 65 or over. In the long run, and unless more immigration is resorted to, the decline and ageing of the population will contribute to a significant reduction in active workforce. The greater integration of women in the labour market since 2012 and the launch of Abenomics are mitigating, for the time being, these structural difficulties.
Beyond the risk this poses to economic growth, it remains to be seen whether these tensions on the labour market will finally lead to a turning point in terms of wage growth in 2024. The latter did not really gain momentum in 2023, even as inflation heightened in the country and corporate profits and margins reached record levels last year.
Guillaume Derrien with the collaboration of Nassim Khelifi, intern
Japan: Tankan, employment conditions in Q4 2023 (Z-score)
