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60% of Japan firms abroad expect to log profits in 2021: poll

  • December 11, 2021
  • , Kyodo News , 9:31 a.m.
  • English Press

TOKYO – More than 60 percent of overseas affiliates of Japanese companies expect to post operating profits in 2021, rebounding from a record low of 48.0 percent the previous year but still the second-lowest level in the last decade, according to a survey.

 

The reading of 62.6 percent suggests performances by Japanese businesses operating abroad — which slumped significantly in 2020 due to the impact of the novel coronavirus — “have shown an upswing globally, but the momentum of the recovery lacked strength,” said an online survey by the Japan External Trade Organization.

 

By region, 57.1 percent of Japanese businesses operating in the 10-member Association of Southeast Asian Nations forecast they will chalk up profits, while the profits of those operating in Europe and North America have yet to recover to 2019 pre-pandemic levels, it said.

 

According to the survey released Nov. 30, 85.3 percent in South Korea expect to register profits, followed by 72.2 percent in China, 66.3 percent in Germany, 63.4 percent in Indonesia, 62.6 percent in Thailand, 59.2 percent in the United States and 54.3 percent in Vietnam.

 

JETRO conducted the survey from Aug. 24 to Sept. 30, before the first case of the Omicron coronavirus variant was confirmed in South Africa in November.

 

A total of 18,932 local subsidiaries of Japanese firms, as well as branches and offices of Japanese companies, in 82 countries and territories were polled, with 7,575, or 40 percent, giving valid responses.

 

By sector, 82.0 percent of respondents in the banking sector and 79.0 percent of those in precision machinery expect to log profits, while 85.1 percent of respondents in the hotel and travel businesses forecast otherwise.

 

Citing survey results, the government-backed trade promotion agency said that when businesses resumed operations, they were affected by semiconductor shortages and rises in steel and other material costs, as well as an increase in ship transportation costs.

 

“We are continuing to see a difficult situation for many companies,” JETRO Chairman Nobuhiko Sasaki said at a Nov. 30 news conference.

Looking ahead, 48.3 percent of the respondents across the world expect their profits to increase in 2022 from a year earlier, 42.1 percent see them as unchanged and 9.6 percent expect they will fall, according to the survey.

 

By country, 63.7 percent of the respondents in Mexico forecast their profits will rise, followed by 60.2 percent in Indonesia, 56.2 percent in Vietnam, 51.3 percent in the United States, 46.6 percent in Thailand, 44.6 percent in Britain and 43.0 percent in China.

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