Omron 2007 Annual Report Download - page 46

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FISCAL 2006 MANAGEMENT’S DISCUSSION AND ANALYSIS
5.0
-5.0
0
10.0
Real Private Capital Investment
Growth Rate
-10.0
97 98 00 02 0499 01 03 0605
Note: Change from the previous year,
seasonally adjusted
Source: Cabinet Office, Government of Japan
(FY)
(%)
Note: Seasonally adjusted
Source: Cabinet Office, Government of Japan
1,400
1,500
1,600
Machinery Orders Growth Rate
(Manufacturing)
1,300
0
5.0
10.0
-5.0
Q1 Q1 Q2 Q3Q2 Q3
2005 2006
Q4Q4
Orders (left axis)
Change from the previous quarter
(right axis)
(FY)
(Billions of yen) (%)
00 0201 03 04 05 06
Source: Ministry of Economy, Trade and Industry
100
140
180
Indices of Electronic Parts and Devices
60
Shipments
Productions
Inventory
(Seasonally adjusted indices, 2000 average =100)
(FY)
03 04 05 06
20,000
10,000
40,000
30,000
50,000
60,000
Silver and Copper Prices
0
400
200
800
600
1,000
1,200
0
Silver (left axis)
Copper (right axis)
(Yen/kg) (Yen/kg)
(FY)
The Japanese economy improved steadily as corporate prof-
its improved and capital investment increased, in addition to which
there were improvements in employment and income situations.
While there were concerns for the U.S. economy such as adjust-
ments in the housing sector, it held firm supported by capital
investment and consumer spending. The European economy also
did well overall where improved corporate earnings led to
increased capital investment and as consumer spending recov-
ered. As Asian economies continued to expand led by exports, in
particular China maintained its high rate of growth. Furthermore,
India has shown remarkable economic growth.
1. Macroeconomic Environment
Market Environment
Note: The macro indicators may be changed in subsequent revisions. The figures presented are the newest data as of the end of June 2007.
Domestic Macroeconomic Environment
Growth rates of real GDP for each country (calendar year basis)
2000
2001
2002
2003
2004
2005
2006
Japan
2.9
0.2
0.3
1.4
2.7
1.9
2.2
U.S.
3.7
0.8
1.6
2.5
3.9
3.2
3.3
Canada
5.2
1.8
2.9
1.9
3.1
3.1
2.8
Germany
3.2
1.2
0.0
-0.2
1.3
0.9
2.8
France
4.0
1.8
1.1
1.1
2.3
1.7
2.2
U.K.
3.8
2.4
2.1
2.7
3.3
1.9
2.8
Italy
3.8
1.7
0.3
0.1
1.0
0.2
1.9
Russia
10.0
5.1
4.7
7.3
7.2
6.4
6.7
China
8.4
8.3
9.1
10.0
10.1
10.4
10.7
Korea
8.5
3.8
7.0
3.1
4.7
4.2
5.0
India
4.4
5.8
3.8
8.5
7.5
8.8
9.4
2. Market Trends Affecting the Omron Group
The market environment surrounding the Omron Group was favorable for the
main product area of factory automation control equipment supported by demand
for capital investment, and was solid for business and consumer equipment for IT
and digital related products as the electronic parts industry recovered. Growth con-
tinued for automotive electronics as the needs remained high for car electronics in
the safety and environmental areas. Furthermore, as railroad companies all over
Japan increased reciprocal use of IC cards, demand for updating equipment in rail-
way stations increased. Rising costs for raw materials such as copper and silver
were factors putting pressure on profits.
Source: Cabinet Office “Overseas Economic Data” June 2007, etc.
Brazil
4.3
1.3
2.7
1.1
5.7
2.9
3.7