Fluctuations in Domestic Economic Conditions, New Housing and Renovation Demand

「The number of new housing starts, which has a significant impact on demand trends for our Group, was substantially higher year on year in April and May, reflecting a rebound from the low levels recorded in the previous year and an increase in starts of owner-occupied and for-sale housing.」

「New housing starts declined sharply from April onward as the rush demand seen through March, ahead of the April 2025 revisions to the Building Standards Act and the Energy Conservation Act, reversed. Although a temporary recovery was seen during the summer, starts began declining again from November, against a backdrop of soaring construction material prices and rising mortgage rates, and totaled approximately 711,000 units from April through March, down 12.9% year on year.」

「The cumulative total from April through March remained at approximately 711,000 units, down 12.9% year on year.」

「Meanwhile, new housing starts, which are closely related to our demand, continued to decline substantially in the first quarter. This was largely due to the reversal of front-loaded demand ahead of the revision to the Building Energy Efficiency Act in April this year. Although the decline narrowed in the second quarter, starts remained below the previous year's level.」

「Regarding economic conditions, the company recognizes that the decline in new housing starts has continued and that competition within the industry remains intense. Meanwhile, the renovation market and non-residential market, mainly hotels, office buildings and commercial facilities, are expected to grow,」

「Regarding economic conditions, the company recognizes that the decline in new housing starts has continued and that competition within the industry remains intense.」

「During the cumulative third quarter under review, Japan's economy continued to see a recovery in domestic consumer activity, reflecting the normalization of social and economic activity following the COVID-19 pandemic. However, the prolonged situation in Ukraine and worsening conditions in the Middle East led to increases in various prices, including persistently high raw material and energy prices, and the outlook remains uncertain.」

「During the cumulative second quarter under review, Japan's economy continued to see a recovery in domestic consumer activity, reflecting the normalization of social and economic activity following the COVID-19 pandemic. However, the prolonged situation in Ukraine, worsening conditions in the Middle East and the yen's depreciation due to the effects of global monetary tightening led to increases in various prices, including persistently high raw material and energy prices, and the outlook remains uncertain.」

「During the cumulative first quarter of the current fiscal year, Japan's economy moved further toward normalization of socioeconomic activity, including the reclassification of COVID-19 as a Class 5 infectious disease, and domestic consumption began to recover. However, the outlook remained uncertain due to persistently high raw material and energy prices caused by the prolonged situation in Ukraine and other factors, as well as the effects of global monetary tightening.」

「Regarding economic trends, the Company recognizes that a decline in the number of new housing starts is expected and that intense competition within the industry continues. Meanwhile, the renovation market and the non-residential market, mainly hotels, office buildings and commercial facilities, are expected to grow,」

「During the cumulative third quarter of the current fiscal year, Japan's economy remained uncertain due to rising raw material and energy prices caused by the prolonged situation in Ukraine and other factors, as well as sharp fluctuations in foreign exchange rates, although economic activity showed signs of normalization as restrictions on activity were eased while the impact of COVID-19 continued.」

「During the first 2 quarters of the current consolidated fiscal year, Japan’s economy remained uncertain due to an increase in infections during the 7th wave of COVID-19, rising raw material and energy prices resulting from the prolonged situation in Ukraine, and the rapid depreciation of the yen, among other factors.」

「Regarding economic trends, the Company recognizes that a decline in the number of new housing starts is expected and that intense competition within the industry continues.」

「Looking ahead, concerns remain that conditions will continue to be uncertain due to the resurgence of COVID-19 infections and the effects of soaring prices and supply shortages of residential timber, known as the "wood shock," among other factors.」

「During the first 2 quarters of the current consolidated fiscal year, Japan’s economy remained difficult due to a sharp increase in infections caused by the 5th wave of COVID-19 and other factors. Although personal consumption showed signs of recovery amid intermittent states of emergency, uncertainty about the economic outlook continued.」

「The situation remained extremely challenging, as the spread of COVID-19, which had continued since the previous year, had yet to subside. From April 2021, some regions were placed under priority preventive measures and a third state of emergency was declared, significantly restricting socioeconomic activity depending on the industry and region.」

「A substantial portion of the Group's revenue is significantly affected by domestic economic and demand trends. A significant fluctuation in new housing and renovation demand resulting from deregulation of laws and systems, changes in housing policy, interest-rate trends or other factors could affect the Group's operating results and financial position.」