Survey: Majority of big companies feel economy is at a ‘standstill'

Asahi Shimbun

2 days ago

Supermarket employees display bags of stockpiled rice released by the central government on May 31 in Tokyo's Ota Ward. (Tatsuo Kanai)
Fifty-seven of 100 major Japanese companies believe the domestic economy is 'at a standstill,' the first time since the COVID-19 pandemic for a majority to feel that way, an Asahi Shimbun survey showed.
The figure represents an increase of 16 companies from the previous survey in July 2024.
The latest 100-company survey was conducted from June 6 to 19.
The last time more than 50 responding companies said the economy was at a standstill was in spring 2021, during the crisis over the novel coronavirus.
The number of companies in the latest survey that say the economy is 'moderately receding' was nine, up six from the 2024 survey.
Only 33 companies feel the economy is 'moderately expanding,' a significant decrease from 53 in the 2024 survey. And zero companies believe the economy is 'significantly expanding,' the same as in the previous survey.
When asked to choose up to two reasons for their evaluations, 'consumer spending' was selected by 54 companies, followed by 'capital investment' by 28 and 'wages' by 25.
'Wage growth has not kept pace with the sustained rise in prices of food, energy and other items, and households are saving money,' Makoto Tani, chairman of Skylark Holdings Co., said.
The survey also found that the most common concern for Japan's economy is 'intensifying trade friction, including tariffs,' cited by 65 companies, followed by 'sluggish personal consumption,' selected by 41.
'If trade friction intensifies, it could put pressure on corporate profits and cause employment uncertainty,' Shinichiro Funabiki, president of MS&AD Insurance Group Holdings Inc., said. 'There are concerns that this could lead to a decline in domestic consumption and investment stagnation, contributing to a slowdown in the overall economy.'
Teiichi Goto, president of Fujifilm Holdings Corp., said, 'The future of tariff negotiations with the U.S. remains uncertain, and depending on the outcome, there could be a negative impact.'
The majority of survey respondents also take a cautious view of the global economy.
Sixty-one said the world economy is 'stagnant,' up 17 from the previous survey, while 18 believe the global economy is 'moderately decelerating.'
Two companies said it was 'solidly decelerating,' compared with zero in the previous survey.
Among the optimists, 15 companies feel the global economy is 'moderately expanding,' and one responded that it is 'solidly expanding.'
Eighty companies said the biggest threat to the global economy is 'tariff action by the U.S. Trump administration.' And half of the 100 companies said they are concerned about the outlook for the U.S. economy.
'The uncertainty caused by the U.S. tariff policy is covering the entire world,' said Toru Nakashima, CEO of Sumitomo Mitsui Financial Group. 'Excessive pessimism is being corrected, but the economy remains unpredictable with significant downside risks.'
Six companies cited 'the impact of international conflicts and terrorism in the Middle East and elsewhere' as a concern for the global economy.