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63% of executives say domestic economy has leveled off, Nikkei poll of 100 major Japanese companies

  • October 4, 2021
  • , Nikkei , pp. 1, 5
  • JMH Translation

Business executives see the economy as flat today. In the Nikkei poll of 100 major Japanese companies, slightly over 60% of business executives said the economy is level compared with three months ago. COVID-19 vaccinations have been rolled out, but very contagious variants have spread. Some 60% predict COVID-19 will be under control in 2023, up from 16.0% found in the previous poll taken in June. Companies are searching for ways to normalize business activities while reining in the spread of the virus.


The survey of major Japanese corporations was taken from Sept. 15–30, and the presidents (or chairpersons) of 144 companies responded. The poll is taken about once every three months.


Asked for their views on the economy today, 63.8% described it as “flat,” up 4.1 percentage points from the figure in the previous survey. Some 29.2% said the economy is “gradually expanding,” down 4.6 points. Kirin Holdings President Isozaki Yoshinori commented that “the state of emergency has been lifted, but personal consumption remains low as COVID variants continue to pose a risk.”


A total of 74.3% of executives described the global economy as either “expanding” or “gradually expanding,” down 7.7 points from the June survey. Business sentiment among Chinese companies has turned down with the electric power shortage. A shadow has fallen over recovery in the U.S. as the Delta variant spreads. Sumitomo Chemical President Iwata Keiichi comments that “the status of recovery differs by country and by industry. There are signs of sluggishness because it is not clear how the U.S. will exit from its monetary relaxation policy.”


Executives are less optimistic than three months ago about when COVID-19 will be brought under control due to the spread of new variants. Asked when the virus would get under control worldwide, 62.7% said “in 2023,” making it the most frequently given response (calculated excluding “no answer” responses). No executives said they expect COVID-19 to stop having an impact on the economy by the end of this year. Meanwhile, a total of 22.7% said “in 2022.” In the previous poll, the most frequently given response was “in 2022” (48.2%).


With the prolongation of COVID-19, companies are rushing to normalize their business activities. Some 24.8% said that they are already using vaccination certificates, while some 55.2% said they are considering using them. Meanwhile 50.0% said that they will restart full-fledged overseas business travel in the April–June quarter next year.


Companies are also moving forward with the use of vaccination certificates and proof of negative test results. Some 15.7% said they are already using them while 23.6% said they are considering doing so. Fujifilm Holdings President, CEO, and Representative Director Goto Teiichi explains, “(Our employees) carry a COVID-19 certificate with them when they visit clients.” Regarding asking customers to present COVID-19 certificates, Rakuten Group Mikitani Hiroshi says, “Some inns registered with Rakuten Travel are starting to offer benefits to travelers who present vaccination certificates.”


COVID-related stagnation in supply chains has become more serious. Some 80% of manufacturers said that “COVID-19 is impacting production activities and procurement of components at their domestic or overseas manufacturing bases.” Some 47.1% of respondents said that they do not know when this situation will improve. It looks like the supply chain problem will continue for the time being.


Slightly less than 70% of manufacturing companies said they are encountering delays in their parts and materials procurement. This is the result of decreased production at business partners due to the spread of highly contagious COVID variants. Companies are rushing to increase inventory and take other actions, but supply chains will apparently continue to be negatively impacted for a while. (Abridged)

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