Impact of COVID-19 Spread on Business Activities and Order Intake Environment

「If a new infectious disease spreads, smooth business operations could become difficult due to business interruptions caused by infections among employees and others, as well as the possibility that the business plans of private-sector companies, which are the main clients for our building construction business, could be scaled back or changed.」

「During the current consolidated fiscal year, the Japanese economy made significant progress toward normalizing economic activity as COVID-19 was reclassified to Category V under the Infectious Diseases Control Law and inbound demand increased, enabling the service industry to make a full recovery to approximately pre-COVID levels.」

「During the six months of the current consolidated fiscal year, the Japanese economy transitioned to the post-COVID period following COVID-19’s reclassification to Category V, and personal consumption showed signs of recovery as various restrictions were lifted.」

「Although concerns remain about inflation stemming from the situation in Ukraine, the easing of COVID-19’s classification to Category V has led to increased movement of people, and personal consumption and inbound demand are showing signs of recovery.」

「While the impact of COVID-19 on the business environment surrounding our group has become more limited, we expect fuel and materials prices driven by the situation in Ukraine to remain elevated for some time.」

「If personal consumption deteriorates due to higher resource prices and inflation caused by yen depreciation, this could adversely affect corporate earnings and potentially restrain capital investment. Risks including a slowdown in the global economy due to higher interest rates and a resurgence of COVID-19 also remain simmering.」

「During the first quarter of the current consolidated fiscal year, the Japanese economy remained highly uncertain due to the impact of COVID-19, although the reapplication of priority preventive measures was avoided and personal consumption was on a recovery trend.」

「Under a difficult external environment in which most of the planning period will take place amid COVID-19」

「In addition to fierce competition for orders due to the prolonged infectious disease pandemic, the business environment surrounding the Group has seen the material price inflation risk become apparent, resulting in an extremely challenging phase not only for securing orders but also for executing construction work.」

「Recently, some companies have begun resuming capital investment that had been postponed or suspended due to the impact of COVID-19, but intense competition for orders continues as the construction market contracts rapidly following the end of demand related to the Tokyo Olympic and Paralympic Games.」

「Although the direct impact of COVID-19 on the construction industry to which our group belongs has been limited compared with other industries, companies remain cautious about capital investment because of the uncertain outlook for corporate earnings, as they were in the previous fiscal year, and intense competition continues for orders in our building construction business, which is primarily focused on private-sector projects.」

「The business environment surrounding our group has become increasingly confused due to the global spread and prolonged duration of COVID-19, and conditions are expected to remain difficult.」

「Recently, the infection has shown signs of resurging, and the outlook remains uncertain, with no clear path to an economic recovery.」

「During the six months of the current consolidated fiscal year, the Japanese economy was in an extremely difficult situation due to the global spread of COVID-19, bringing major changes, including to social and daily lifestyles. Although economic activity has recently resumed and some industries have shown signs of recovery, there are concerns about the impact of a resurgence of the infection on corporate activity, and the outlook remains uncertain due to factors of concern including political and economic uncertainty overseas.」

「During the first quarter of the current consolidated fiscal year, the Japanese economy was subject to significant constraints on economic activity due to the global spread of COVID-19, while corporate earnings deteriorated sharply amid the slowdown in overseas economies. Personal consumption also fell substantially under the impact of requests to refrain from going out and reduced operating hours pursuant to the state of emergency, leaving the economy in an extremely difficult situation.」

「The global spread of COVID-19 and concerns that it may persist have affected economic activity.」