In Japan, concerns about a new wave of coronavirus infections are rising fast. Albeit, the country, so far, has fewer COVID-19 cases, as compared to many Western countries.
Japanese companies are bracing for the fourth round of coronavirus infections. A monthly poll showed that many expect a new wave to further hit their businesses after suffering blows from the first three waves.
Some companies indicated that a delay in vaccinations versus other Group of Seven advanced countries would trigger this expectation in the poll. Additionally, a lacking sense of crisis among the public.
The Corporate Survey has found the same anticipation from almost all Japanese firms that were polled. It is said to likely peak in May, around the time of the Golden Week holidays.
If the new wave of infections led Prime Minister Yoshihide Suga’s government to issue a fresh state of emergency, that would hurt sales at 59% of firms. According to an April 2-13 survey, this was as such issuance entails business restrictions and penalties.
A chemicals maker manager wrote in the survey that restaurant and tourism industries have been so exhausted that he is concerned a new wave of infections will deal a body blow.
Moreover, a wholesaler said a new wave of infections and a state of emergency would make companies more cautious about spending and output.
Hardest-hit Industries Remain Under Pressure
Global demand and domestic consumption have helped Japan to emerge from the COVID-19-induced slump. However, the hardest-hit industries such as restaurants and hotels remain under pressure.
If they issue another state of emergency, nearly two-thirds of non-manufacturers sales should decline further by sector.
Many companies in industries such as wholesale/retail, transportation/utilities, and other services have seen sales drop.
For the coming fiscal year starting April 2022, nearly three-quarters of Japanese firms saw no change to their hiring plans. This emphasizes a steady job market despite the pandemic.
The survey also found about one out of five firms would either freeze hiring or cut it in the fiscal year 2022. Just one out of 10 firms plan to increase hiring, and fewer than one in 10 firms considered layoffs.
A paper/pulp maker manager wrote that they had a big cut in hiring for this fiscal year. Business results remain hard to recover for the time being. So they will curb hiring for fiscal 2022 as well, he added.