Over 80 percent of major companies in Japan are expecting the country’s economy to expand in the next year, driven by the removal of COVID-19 restrictions and an increase in consumer spending, according to a recent survey conducted by Kyodo News. The survey, which included 114 companies such as Toyota Motor Corp. and Fast Retailing Co., operator of the Uniqlo clothing chain, revealed a significant increase in optimism compared to the previous year.
In the survey, 82 percent of the companies projected economic expansion, a notable increase from the 55 percent recorded in the previous summer when firms were concerned about price surges. The results also indicated that 94 percent of those expecting expansion attributed it to the recovery of consumer spending. Additionally, 67 percent cited the recovery in capital expenditure as a contributing factor, while 55 percent mentioned the departure from the pandemic. Many also expressed hopes for increased spending by foreign tourists visiting Japan.
The survey revealed a decrease in the percentage of respondents who expect economic conditions to remain unchanged or contract moderately, dropping from 42 percent to 15 percent compared to a year ago. Among the firms that anticipate a slowdown, many cited concerns about the U.S. economy as a reason for their response.
While 59 percent of the companies stated that their business performance is on an expansionary trend, a similar number expressed concerns over rising material and energy costs, which are putting pressure on their profits. As a result, around half of the surveyed companies plan to raise the prices of their goods and services throughout the next fiscal year starting in April.
The survey also highlighted the issue of staffing, with nearly half of the companies reporting being short-staffed. However, only 24 percent said they were considering pay hikes. When it comes to foreign exchange rates, many respondents expressed a desire for the yen to trade between 120 and 140 against the U.S. dollar.
Regarding the achievements of Prime Minister Fumio Kishida’s government, 25 percent of respondents identified its efforts to secure domestic production bases for advanced semiconductors. However, only 5 percent believed that the government’s goal of increasing the proportion of female executives in major companies to over 30 percent by 2030 would be achieved by the end of this year.
The survey encompassed representative companies from various industries and was conducted from early July to early August. The results demonstrate a positive outlook for the Japanese economy as COVID-19 restrictions gradually ease, leading to increased consumer spending and supporting economic expansion.
