TOKYO- Nearly half of Japan’s companies have no immediate plans in place to help counter the impact of the coronavirus pandemic, although a third of those surveyed in a Reuters poll indicated they were looking to improve productivity to cushion the blow.
The survey suggests a long path to recovery for Japan. The world’s third-largest economy is expected to shrink at its fastest pace in decades this fiscal year, with economic activity not seen returning to pre-pandemic levels for another 2-3 years, analysts have said.
In the latest monthly corporate survey, 49 percent said they had no plans in place to cushion the hit to their sales and profits this summer. Among transport equipment makers, Japan’s key industry, the rate was higher at about 66 percent.
However, 51 percent of the participants said they have plans to overcome the pandemic pain. About 60 percent of this group, or 30 percent of total, said improving productivity was their top pick for dealing with the hit to business.
Reviewing business activity and planning new business were the second and third popular choices, though no transport equipment makers picked these.
In written comments, many firms said cutting costs was the best way to respond to declining demand.
“We are taking various steps, but none of them are expected to produce major effects near term,” a chemicals maker manager wrote in the June 30-July 10 survey, conducted on condition of anonymity so respondents can express their opinions freely.
Three fourth of the firms said their number of workers was unchanged from a year earlier, while two thirds of transport equipment makers said their staffing level was steady.
The survey underscored the pain inflicted on the automobile sector, which significantly impacts many other industries.
Some 44 percent of transportation equipment makers have furloughed up to half their employees, versus 14 percent of overall firms.
Global car demand has plunged since March as virus-related lockdowns kept people indoors and prompted factories to close.
While many countries have been reopening their economies, analysts say it could take up to five years for demand to recover to 2019 levels.
