Japan Manipulated Construction Order Statistics for 8 Years... Asahi Reports "Overstated by 42 Trillion Yen"

[Image source=AP Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] It has been revealed that Japan's construction contract order statistics for the 2020 fiscal year (April 2020 to March 2021) were inflated by about 4 trillion yen (approximately 42 trillion won).

On the 25th, Asahi Shimbun conducted an independent analysis based on data from Japan's Ministry of Land, Infrastructure, Transport and Tourism, finding that the total amount for the 2020 fiscal year was 79.5988 trillion yen (approximately 837.7 trillion won), which was about 5% overstated.

Previously, Asahi had exposed that the Ministry of Land, Infrastructure, Transport and Tourism had manipulated construction contract order statistics over the past eight years by using double counting methods.

These statistics are compiled by the Ministry of Land, Infrastructure, Transport and Tourism based on monthly contract order performance submitted by about 12,000 construction companies to 47 prefectural governments.

The manipulation occurred when construction companies submitted several months' worth of contract order performance to the prefectural governments after the submission deadline.

For example, if Company A submitted contract orders for June to August all at once, the three months' worth of performance was recorded as August's performance.

The problem was that for June and July, which Company A did not submit, the statistics were not recorded as '0' but instead calculated using the average performance of other companies that submitted data for those months, resulting in double counting for June and July.

Since construction contract order statistics are also reflected in the Gross Domestic Product (GDP), there is a possibility that Japan's GDP for the 2020 fiscal year was also inflated. Japan's GDP for the 2020 fiscal year was 535.5 trillion yen (approximately 5640 trillion won).

Asahi pointed out that from the 2013 to 2019 fiscal years, the amount of double-counted data was even greater than in the 2020 fiscal year, suggesting that construction contract order statistics during that period may have been even more inflated.