Uncertainty in the Global Economy, Resource Prices and Consumer Sentiment

「The price of polyethylene resin, our main raw material, rose sharply due to the impact of rising tensions in the Middle East and remained elevated as various expenses, including logistics and labor costs, continued to increase. Procurement was also affected by supply constraints.」

「During the fiscal year, the Japanese economy expanded moderately after the downward pressure from tariffs at the beginning of the period proved limited, but the outlook is uncertain amid heightened tensions in the Middle East.」

「In addition, rising tensions in the Middle East have caused prices to increase and led to supply constraints in some areas, affecting procurement.」

「There are concerns about economic disruption caused by soaring resource prices and global supply chain disruptions, which would constrain our group's sales if they occurred.」

「Production declined from July due to lower orders for production machinery and the suspension of operations at motor vehicle plants, among other factors. Although it rose across many industries in September, the outlook remained uncertain on an averaged basis.」

「The main businesses of our group are the manufacture and sale of industrial packaging materials, which are highly sensitive to domestic production trends. However, demand for our core kraft paper bags has not recovered as much as anticipated. The situation remains uncertain, with mounting cost pressures from higher energy prices, personnel expenses and other factors.」

「In the October-December quarter, exports of goods declined as economic conditions deteriorated in the United States, Europe and China. At the same time, forecasts of positive growth have been seen in a number of cases, reflecting a recovery in services consumption and inbound demand following the nationwide travel subsidy program and the easing of border measures, as well as a reactionary decline in imports.」

「Personal consumption subsequently stagnated amid the seventh wave of infections and higher prices. Although the impact of supply constraints caused by China's urban lockdowns has faded, exports have remained sluggish, and forecasts of slower growth in the July–September quarter are widespread.」

「Resource prices have remained elevated, partly due to the prolonged conflict in Ukraine.」

「The global economy is now facing concerns over inflation and higher interest rates resulting from monetary tightening, compounded by turmoil surrounding the situation in Ukraine, raising fears of increasingly negative effects such as soaring resource prices and disruption in financial markets.」

「During this period, international commodity prices rose, increasing costs through higher resource and materials prices. Together with the fact that shortages of components and materials such as semiconductors had not yet been resolved, this weighed on the economic recovery. In addition, the risk of a renewed spread of infection materialized in 2022, and consumption activity was expected to take more time to normalize.」

「Risk factors have begun to materialize, including higher resource and raw material prices resulting from rising international commodity prices.」

「The recovery in economic activity is expected to remain gradual until vaccination rates rise and constraints on economic activity caused by the spread of infection ease.」

「Economic activity worldwide fell sharply in the April-June quarter and improved in the July-September quarter partly as a reaction to the earlier decline, but waves of infection continued to recur, leaving conditions far from normal.」

「Economic activity was gradually improving in the July-September period, but it could not yet be said that the spread of the infectious disease was subsiding, and normalization was expected to take more time.」

「Exports of goods from Japan have remained weak amid disruptions in the global economy. Although there were signs that the semiconductor market was bottoming out and exports to China were recovering, exports to the United States and Europe, particularly automobiles, fell sharply, while exports of intermediate and capital goods declined.」

「In the January-March quarter, the COVID-19 pandemic spread worldwide, and … the situation has developed to the point where it is impossible to foresee when the global economy will recover.」

「Looking ahead, although the economy temporarily declined due to the consumption tax increase and natural disasters, exports are expected to recover somewhat as global IT demand bottoms out, and the prolonged slump in private consumption is expected to be avoided. A return to a path of gradual recovery is therefore expected before long, although the novel coronavirus that emerged in China is becoming a concern.」

「The slowdown in China's economy spread to Asia and other regions, and industrial production fluctuated against a backdrop of continued weak exports despite signs of bottoming in some areas.」

「Exports, which declined in the January-March quarter, remained weak in the April-June quarter despite signs of bottoming in some areas. China's economy slowed amid trade friction with the United States, with the impact spreading to Asian countries, and the recovery in Japan's exports, particularly to Asia, has been delayed. Signs of stagnation are growing stronger in the global economy, including Europe.」

「The U.S. economy remained firm partly due to the effects of tax cuts, but signs of a slowdown emerged toward the end of the fiscal year. In China, investment cooled and the economy slowed as the country addressed U.S.-China trade friction and excessive debt. The impact spread to Asian countries and parts of Europe, where the issue of the United Kingdom's withdrawal from the EU remained unresolved, and signs of a gradual slowdown in the global economy grew stronger.」

「Although exports had moved beyond the impact of factory shutdowns caused by natural disasters, growth slowed due to a pause in demand related to smartphones, expectations that U.S.-China trade friction would be prolonged, and the slowdown in the Chinese economy. The contribution of external demand to economic growth declined. Increasing uncertainty in the global economy is affecting the pace of Japan's recovery.」

「Concerns have arisen over the course of trade friction stemming from the shift toward protectionist policies in the United States and the resulting appreciation of the yen. Together with rising crude oil prices and higher U.S. tariffs on steel and aluminum, these factors have gradually worsened business sentiment, particularly in materials industries.」

「In addition to rising raw material costs and slowing export growth, concerns over the shift toward protectionist policies in the United States and the resulting impact of trade friction have kept business sentiment cautious, particularly in manufacturing.」

「There are concerns that growth will slow in the second half of the fiscal year as vehicle sales lose momentum and the effects of economic measures run their course.」

「Looking ahead to the next fiscal year, as political and geopolitical risks increase around the world, it is extremely difficult to predict how long the current upward trend in the global economy will continue.」

「There are aspects of global economic conditions and resource prices that are difficult to predict, while domestic consumer sentiment is expected to remain cautious.」