TOKYO—Japan’s first-quarter preliminary gross domestic product grew 4.9 percent on an annualized basis in the latest indication that the world’s second-largest economy is on the path to recovery.
This is the fourth straight quarter of growth for Japan. The country’s GDP advanced 1.2 percent compared to the fourth quarter of last year. Exports in the January to March period surged 30.5 percent on an annualized basis.
The Japanese government often revises preliminary GDP figures several months later.
Japan’s economic stagnation has been rough on luxury goods and fashion companies but there are signs that the market is beginning to stabilize. Yano Research Institute Ltd. said Wednesday that sales of imported clothing and accessories in Japan tumbled a record 15.9 percent last year but sales growth in 2010 is expected to inch up less than one percentage point.
Yano attributed 2009’s drop- the largest on record- to the worldwide economic slump and stagnant consumer spending in the country. Sales of imported clothing and accessories in Japan last year totaled 894.6 billion yen, or $9.57 billion at average exchange for the period, Yano said. This is less than half the size of the market when it was at its peak in 1996 and served as a cash cow for luxury brands. Sales in 2010 are seen coming in at 902.8 billion yen, or $9.75 billion at current exchange.
Yano, which surveyed trading companies and luxury goods houses for its research, predicts that accessible luxury brands and trendsetting high-end fashion brands are becoming increasingly popular. The company also points to growth in the casual apparel market.
Brian Salsberg, a principal at McKinsey & Company, Japan and leader of the consumer, retail and apparel practice, also noted an uptick in sentiment.
“While few see a full recovery to post Lehman-shock levels, most Japan-based luxury industry executives we spoke with over the past few months are at least cautiously optimistic that this year will be better than last year,” he said.
“An early review of our most recent consumer research on Japanese luxury goods consumers suggest that they are somewhat more upbeat–but also a lot more discerning and value-oriented vis-a-vis this category than they were even one to two years ago,” Salsberg said.