TOKYO-Reuters Tankan survey revealed that the confidence of Japanese manufacturers deteriorated to a five-month low in September due to the latest wave of COVID-19’s impact on the world’s third-largest economy.
The monthly survey shows that manufacturers’ sentiments have fallen due to the global chip shortages of automakers and other export-dependent companies. The survey follows the Tankan quarterly survey closely followed by the Bank of Japan (BOJ), which will be held on October 1st. maturity.
The survey shows that the confidence of service companies has declined, but it is expected to improve again in the next three months.
Official data last week showed that in the three months to June, Japan’s economic growth rate increased by 1.9% annually, exceeding expectations. Therefore, a pessimistic view of the current situation suggests that Japan’s economic growth may slow in the third quarter.
A survey of 503 large and medium-sized companies from September 1 to 10 showed that due to the economic slowdown in China and emerging markets, companies are struggling to cope with the problem of sluggish domestic and foreign demand. Among them, 264 companies have made Response.
“Due to the stagnant supply of parts, production and sales activities could not be carried out,” a manager of a machinery manufacturer wrote in a poll.
“The semiconductor shortage in Southeast Asia and the coronavirus lockdown are having a major impact.”
The Reuters manufacturer’s short-term sentiment index fell to 18 from a three-and-a-half-year high of 33 set in August, falling to its lowest level since April. Opinion polls show that the service index fell to minus 2 from 5 last month. (For detailed result table, please click)
The “tanan” business survey released by the Bank of Japan in July showed that the business confidence of large manufacturers is expected to remain positive in the third quarter after reaching a two-and-a-half-year high in the second quarter.
In the Reuters Tankan, the company reported that the impact of global chip shortages is deepening, as activities and broader demand continue to be hampered by the health crisis, and some companies said they are being affected by rising raw material prices.
“The effects of rising raw material prices are beginning to show, while the Chinese and American economies are slowing down,” a manager of a chemical manufacturer wrote in the survey.
The Reuters Tankan survey showed that manufacturers’ business confidence was basically stable at 19 in December, while the business confidence of service companies is expected to rise to 7.
A manager of a service industry company said: “Due to the fifth wave of the coronavirus, no one has booked overnight stays and banquets,” indicating the vulnerability of private consumption, which accounts for more than half of the Japanese economy.
Reuters Tankan Index readings are calculated by subtracting the percentage of respondents who claim to be in poor conditions from those who claim to be in good conditions. A positive reading means that there are more optimists than pessimists.
This News Originally From – The Epoch Times