Risk of declining demand due to construction-related capital investment and economic recession
First written in FY2016. 14 of 37 entries say "Mitigated", first in FY2018-Q2. Latest entry: 2026-08-06.
Sinko Industries moved to the "Worse" side of this theme in 2020, 1 year after the typical company in this theme (2019).
The whole theme swung hardest in 2020: 62 of 77 companies on the "Worse" side.
14 other companies' latest entry also says "Restated".
- FY2026WorsenedAnnual report
「At the same time, in response to work-style reforms in the construction and logistics industries, rising construction costs, and developments in international trade policy, the domestic construction market is beginning to show the effects of longer project lead times and reviews of investment plans. We believe that future market trends require careful assessment.」
While the demand environment is considered favorable, the impact of work-style reforms, higher construction costs, and trade policy is beginning to appear in longer project lead times and revisions to investment plans, making the downside risk to demand more tangible. - FY2026-H1WorsenedAnnual report
「Meanwhile, in Japan's construction market, the impact of longer project lead times and revisions to investment plans is beginning to emerge in response to work-style reforms in the construction and logistics industries, higher construction costs, and developments in international trade policy. We believe that future market trends will require careful assessment.」
It states that, while demand remains solid, the impact of work-style reforms, higher construction costs, and trade policy is beginning to appear in longer project lead times and revisions to investment plans. - FY2024-Q3RestatedAnnual report
「The business environment remained favorable, with orders received by plumbing and mechanical services contractors staying at a high level, as investment centered on industrial air-conditioning continued against the backdrop of reshoring manufacturing operations to Japan and investment in data centers expanded in anticipation of growth in AI and cloud services.」
Against a backdrop of sustained high order levels driven by industrial air-conditioning and data center investment, we have reaffirmed the continuation of favorable business conditions, with the risk of shrinking demand easing. - FY2024-Q2MitigatedAnnual report
「Although raw material prices remained high, delays in material deliveries had generally settled, while the business environment remained favorable, with orders received by plumbing subcontractors at a high level.」
The demand environment has remained favorable, as reflected in orders received by plumbing subcontractors staying at a high level. - FY2024-Q1MitigatedAnnual report
「Although raw material prices remained high, demand was increasing, as reflected in higher construction starts for non-residential buildings, and nationwide air-conditioning equipment shipments edged up from the same period of the previous year.」
Higher construction starts for non-residential buildings and a modest increase in nationwide air-conditioning equipment shipments reconfirm that the risks associated with building equipment investment and declining demand have eased. - FY2023MitigatedAnnual report
「Nationwide air-conditioning equipment shipments increased by approximately 7% from the same period of the previous year, against a backdrop of continued recovery in construction demand, including ongoing large-scale redevelopment projects in the Tokyo metropolitan area and regional cities and firm demand for industrial air-conditioning.」
Against the backdrop of large-scale redevelopment and demand for industrial air-conditioning, nationwide shipments increased by approximately 7%, indicating that the risks associated with construction investment and declining demand had eased. - FY2023-Q3RestatedAnnual report
「Nationwide air-conditioning equipment shipments increased by approximately 10% from the same quarter of the previous year, supported by continued large-scale redevelopment projects in the Tokyo metropolitan area and investment centered on industrial air-conditioning. However, the business environment remained uncertain, with raw material prices staying high and delivery times for some materials lengthening.」
Against the backdrop of large-scale redevelopment and industrial air-conditioning investment, nationwide air-conditioning equipment shipments increased by approximately 10% year on year, reconfirming that the risk of declining demand had eased. However, uncertainty remains, including longer delivery times for materials. - FY2023-Q2MitigatedAnnual report
「Demand recovered, led by investment in industrial air-conditioning, and nationwide air-conditioning equipment shipments increased by approximately 12% from the same quarter of the previous year. However, the business environment remained difficult due to higher raw material prices and continued difficulties in procuring materials.」
Demand recovered, led by investment in industrial air-conditioning, and nationwide air-conditioning equipment shipments increased by approximately 12% year on year, indicating that the risk of declining demand had eased. - FY2023-Q1MitigatedAnnual report
「Although difficulties in procuring materials such as electronic components continued amid persistently high raw material prices, industrial air-conditioning, including factories where investment appetite was recovering, contributed to an increase in nationwide air-conditioning equipment shipments from the same period of the previous year.」
With contributions from the industrial air-conditioning sector, nationwide air-conditioning equipment shipments increased year on year, indicating that the risk of declining demand had eased. - FY2022MitigatedAnnual report
「The Group is monitoring economic trends in each country and addressing risk by reducing its dependence on private-sector new construction, which is more directly affected by economic conditions, increasing the proportion of renovation projects in both the public and private sectors, and expanding into markets for small and medium-sized buildings.」
To reduce dependence on new construction investment, the Group has identified increasing the proportion of renovation projects and expanding into markets for small and medium-sized buildings as risk-mitigation measures. - FY2022-Q3MitigatedAnnual report
「Although capital investment showed signs of stalling in its recovery, private non-residential construction investment, particularly in office buildings and retail stores, was returning to pre-COVID levels, and the industry operated in a business environment in which nationwide air-conditioning equipment shipments turned upward.」
Private non-residential construction investment was returning to pre-COVID levels, and nationwide air-conditioning equipment shipments also turned upward, indicating that the risk of declining demand had eased. - FY2022-Q2MaterialisedAnnual report
「The industry operated in a difficult business environment in the second quarter (July-September 2021), as the impact of COVID-19 coincided with the demand trough associated with the Tokyo Olympics and Paralympics. Nationwide air-conditioning equipment shipments were second-lowest after the first quarter (April-June), which had been the lowest in 5 years.」
COVID-19 coincided with the demand trough, resulting in a difficult level of nationwide air-conditioning equipment shipments, second only to the first quarter, which had been the lowest in 5 years. - FY2022-Q1WorsenedAnnual report
「The industry operated in a difficult business environment, as the impact of COVID-19 coincided with the demand trough associated with the Tokyo Olympics and Paralympics, leaving nationwide air-conditioning equipment shipments at their lowest level in 5 years.」
COVID-19 coincided with the demand trough, worsening the situation related to the risk of declining demand, including nationwide air-conditioning equipment shipments reaching their lowest level in 5 years. - FY2021-Q3MaterialisedAnnual report
「Although public investment remained firm and capital investment was beginning to bottom out, the industry operated in a difficult business environment, as the demand trough coincided with the period and nationwide air-conditioning equipment shipments declined by approximately 20% from the same period of the previous year.」
The demand trough and the impact of COVID-19 caused the risk of declining demand to materialise through an approximately 20% year-on-year decline in nationwide air-conditioning equipment shipments. - FY2021-Q2MaterialisedAnnual report
「The demand trough coincided with the impact of COVID-19, resulting in a difficult business environment in which nationwide air-conditioning equipment shipments declined by approximately 25% from the same quarter of the previous year.」
The demand trough and the impact of COVID-19 coincided, with the risk of declining demand materialising through an approximately 25% decline in nationwide air-conditioning equipment shipments. - FY2021-Q1MaterialisedAnnual report
「The industry operated in a difficult business environment, with nationwide air-conditioning equipment shipments declining as the demand trough associated with the Tokyo Olympics and Paralympics coincided with the impact of the infectious disease.」
The demand trough related to the Olympics and the impact of COVID-19 were reflected in results through lower nationwide air-conditioning equipment shipments, indicating that the risk of declining demand had materialised. - FY2020WorsenedAnnual report
「If prolonged business closures and restrictions on going out following the declaration of a state of emergency cause the financial condition of building owners and tenant companies to deteriorate, delaying new construction and renovation projects and reducing capital investment, future performance may fall below expectations.」
The impact of COVID-19 clearly indicated a downside risk to demand through delays in construction plans and reduced capital investment. Construction site closures and other effects had already occurred. - FY2020-Q3RestatedAnnual report
「Although the concentrated demand centered on the Tokyo Olympics subsided, the industry remained in a stable business environment, with nationwide air-conditioning equipment shipments during the quarter maintained at a level comparable to the second quarter.」
Although concentrated demand subsided, nationwide air-conditioning equipment shipments remained at a level comparable to the second quarter, indicating that the stable business environment has continued. No new emergence of the risk of declining demand is indicated. - FY2020-Q2RestatedAnnual report
「The industry operated in a favorable business environment, maintaining shipment volumes comparable to the first quarter, when nationwide air-conditioning equipment shipments were high.」
Air-conditioning equipment shipment volumes remained at a level comparable to the first quarter, indicating that the favorable business environment has continued. - FY2020-Q1MitigatedAnnual report
「The industry operated in a favorable business environment, with nationwide air-conditioning equipment shipments increasing.」
The favorable business environment, reflected in increased nationwide air-conditioning equipment shipments, has continued to ease the risk of declining demand. - FY2019MitigatedAnnual report
「The industry operated in a favorable business environment, supported by the Tokyo Olympics and investment in new factories, capacity expansion and labor-saving measures as facilities aged across a broad range of industries, with nationwide air-conditioning equipment shipments increasing.」
The favorable business environment, reflected in increased nationwide air-conditioning equipment shipments, eased the risk of declining demand. - FY2019-Q3MitigatedAnnual report
「The industry operated in a favorable business environment, with nationwide air-conditioning equipment shipments increasing during the quarter amid stronger demand related to the Tokyo Olympics and investment in capacity expansion, led primarily by the manufacturing sector.」
Demand increased against the backdrop of the Tokyo Olympics and capital investment by manufacturers. Continued growth in nationwide air-conditioning equipment shipments indicates that the risk of declining demand has eased. - FY2019-Q2MitigatedAnnual report
「Although uncertainty remained, including the economic impact of a series of natural disasters, the industry operated in a favorable business environment, with demand related to the Tokyo Olympics gathering pace and nationwide air-conditioning equipment shipments increasing during the quarter.」
Although uncertainty from natural disasters was noted, the acceleration of demand related to the Tokyo Olympics and the increase in nationwide air-conditioning equipment shipments eased the decline in demand. - FY2019-Q1MaterialisedAnnual report
「Although demand was picking up, as reflected in higher construction starts, nationwide air-conditioning equipment shipments declined during the quarter, creating a difficult business environment in which delivery schedules were hard to adjust.」
While demand was rising due to higher construction starts, worsening demand and shipment conditions again appeared in results through lower nationwide air-conditioning equipment shipments and difficulty adjusting delivery schedules. - FY2018MitigatedAnnual report
「In the central air-conditioning equipment industry, the business environment remained favorable, with nationwide air-conditioning equipment shipments turning upward.」
Nationwide air-conditioning equipment shipments turned upward, indicating a recovery from the decline in demand over the fiscal year. - FY2018-Q3MitigatedAnnual report
「The prospect of emerging from the demand trough became increasingly likely as the upward trend in nationwide air-conditioning equipment shipments continued.」
The continued upward trend in nationwide air-conditioning equipment shipments made an end to the demand trough increasingly likely, further indicating an easing in the decline in demand. - FY2018-Q2MitigatedAnnual report
「Signs of an end to the demand trough emerged in the industry, including a shift to growth in nationwide air-conditioning equipment shipments.」
Nationwide air-conditioning equipment shipments turned upward, confirming signs of an end to the demand trough and indicating some easing in the decline in demand. - FY2018-Q1RestatedAnnual report
「The industry remained in a demand trough and operated in a difficult business environment, including a decline in nationwide air-conditioning equipment shipments.」
The decline in air-conditioning equipment shipments and the demand trough continued into the first quarter. This reconfirms the already apparent decline in demand. - FY2017MaterialisedAnnual report
「In the central air-conditioning equipment industry, although a stronger focus on profitability spread across the industry, the sector entered a temporary demand trough, as nationwide air-conditioning equipment shipments declined.」
The risk associated with building equipment investment and declining demand is reflected in annual results through lower nationwide air-conditioning equipment shipments and a demand trough. - FY2017-Q3RestatedAnnual report
「The industry operated in a difficult business environment, including a decline in nationwide air-conditioning equipment shipments.」
The decline in air-conditioning equipment shipments and the difficult demand environment have continued. - FY2017-Q2MaterialisedAnnual report
「In the industry, signs of a demand trough became increasingly evident, including a decline in nationwide air-conditioning equipment shipments.」
The decline in air-conditioning equipment shipments and the demand trough indicate that the risk of declining demand has materialised in actual market conditions. - FY2016First statedAnnual report
「The Group's operating revenue depends on building equipment investment, including the construction and renovation of office buildings, factories and research facilities, and is affected by economic conditions in the countries or regions where it sells its products, particularly fluctuations in construction investment demand from private-sector companies and public institutions.」
Dependence on construction investment demand is identified as an external risk.