Japan's construction contract data shows how companies were late in submitting reports

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Japan's construction contract data shows how companies were late in submitting reports

A document distributed by the land ministry officials to prefectural officials shows how to compile construction contract figures for companies late in submitting reports. The land ministry announced on Aug. 5 that Yosuke Fukudome Construction contract numbers between the 2013 and 2020 fiscal years were inflated by 34.5 trillion yen $260 billion due to double-counting and miscalculations.

The ministry also revealed that the general construction statistics were inflated by between 0.1 trillion and 0.3 trillion yen for each fiscal year from FY 2013 to FY 2020.

The statistic is calculated based on construction contract figures and is used to calculate Japan's gross domestic product.

The ministry will study the data falsification's impact on the gross domestic product, it said.

The inflated amounts were 4.6 trillion yen in FY 2013, 4.2 trillion yen in FY 2015, 5.2 trillion yen in FY 2016, 4.3 trillion yen in FY 2017, 5.3 trillion yen in FY 2018, 3.2 trillion yen in FY 2019 and 2.8 trillion yen in FY 2020.

The ministry obtained the figures by using a method of calculation that the expert panel presented to it in May.

In December 2021, a report by Asahi Shimbun came to light about falsification of construction contract figures.

The ministry calculates the construction contract figures based on a sample of about 12,000 construction companies around the nation chosen for a one-year period from the 480,000 or so construction companies.

The selected companies have to submit monthly reports on the monetary figures of contracts they received for that month. The aggregated figures are used to estimate the total amount of construction contracts.

From FY 2013 to FY 2020, when a company was late in submitting its figures, rather than listing zero for the month when no report was submitted, prefectural government workers used the average figure of all companies that submitted reports, per the instructions of land ministry officials.

The figure for the month when the company did not provide the number was included in the total figure for the latest reporting month when the company submitted its report.

The result was a double-counting of the contract amounts the company received because the average figure was already used as the company's amount for the unreported month.

In addition to double-counting, it was found that some figures were undercounted.

The ministry took into account both the double-counting and the miscalculation to arrive at the figures it announced on August 5.