Japanese companies believe the country will experience a fourth wave of the 2019 coronavirus disease (Chinese communist virus, COVID-19) outbreak, and many are already preparing for a further blow, according to a monthly Reuters poll.
The Reuters Corporate Survey found that nearly all companies in Japan expect a new wave of the outbreak to emerge in the country. Many companies predict the epidemic will peak around the Golden Week holiday in May, which will dull hopes of a domestic demand-driven economic recovery.
The survey noted that if a new wave of the epidemic prompted Prime Minister Yoshihide Suga’s government to issue another “emergency declaration” involving restrictions on business activities and penalties for violations, it would hurt the sales of 59 percent of Japanese companies.
The survey, conducted by Nikkei Research for Reuters from April 2 to 13, interviewed 482 medium- and large-sized Japanese non-financial companies, and was conducted anonymously so that companies could speak up. About 240 companies responded.
Although global demand and domestic consumption help Japan, the world’s 3rd largest economy, recover from the downturn, however, the restaurant and travel industry and other hard-hit industries are still under heavy pressure.
If the government issues another emergency declaration, nearly 2/3 of the non-manufacturing sector is expected to see a further decline in sales by industry, and many companies in the wholesale/retail, transportation/public utilities and other services industries will see a drop in sales.
However, under the impact of the epidemic, nearly 3/4 Japanese companies do not intend to change their recruitment plans for the next fiscal year, which will begin in April next year, highlighting that the Japanese job market remains solid.
The survey found that about 1 in 5 companies will suspend recruiting or reduce the number of recruits in fiscal year 2022; only 1 in 10 intend to increase talent recruitment. Less than 1 in 10 are considering layoffs.
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