Fluctuations in Economic Conditions, Manufacturing and Leisure Demand

「Order intake and order backlog declined year on year, mainly because major projects ordered in the previous fiscal year for the design and construction of ultrapure water and wastewater treatment facilities and membrane separation systems were completed, orders for major projects were limited, and overseas orders were sluggish amid weak economic conditions in China.」

「受注高、受注残高は純水設備・排水処理設備及び膜分離装置の設計及び施工で前期に受注した大口工事が完工したことに加え、大口工事の受注が少なかったこと、中国の経済状況の不調により海外での受注が低調であったことを主因に減少」

「Revenue increased as design and construction of air-conditioning, water supply and drainage, and sanitary facilities remained strong in the construction segment, manufacturing and maintenance of mechanical parking systems continued to perform well from the previous fiscal year, and revenue from 小寺電子製作所, which joined the Group in June 2025, contributed to the manufacturing segment.」

「Revenue increased significantly, driven by strong manufacturing of ultrapure water and wastewater treatment equipment in the manufacturing segment, manufacturing and maintenance of mechanical parking systems and manufacturing of power control panels, distribution boards and switchboards for large-scale facilities in the construction segment, and progress on construction of a major amusement-park ride system in the leisure segment.」

「The manufacturing segment posted higher revenue because, although manufacturing and assembly of industrial machinery parts declined significantly due to the semiconductor downturn and weaker demand from China, domestic operations involving emulsification and agitation equipment performed well, including large-scale sales to China, and manufacturing and maintenance of environmental equipment also performed strongly.」

「Revenue increased despite a significant decline in the manufacturing and assembly of industrial machinery parts due to the semiconductor downturn and weaker demand from China, as manufacturing of emulsification and agitation equipment performed well, including large-scale sales to China, and manufacturing and maintenance of environmental equipment also performed strongly.」

「Revenue declined in the manufacturing segment due to a sharp drop in industrial machinery parts manufacturing caused by the semiconductor downturn, and in the leisure segment following the closure of the Palette Town Ferris wheel. However, the construction industry segment, which had declined significantly in the previous year due mainly to the impact of longer lead times for electronic components and materials, recovered, and revenue from Shoei Denki Co., Ltd., acquired in August 2022, also contributed, resulting in an overall increase in revenue.」

「Revenue increased only slightly, as manufacturing of water purification and wastewater treatment equipment and shot-blasting machines, and maintenance of emulsification and agitation equipment progressed steadily, but manufacturing of industrial machinery parts declined due to weaker demand for semiconductors and electronic equipment.」

「The manufacturing segment was significantly affected by the decline in customers' large-scale capital investment projects involving cosmetic emulsification equipment, agitators and other products, while the construction industry segment was significantly affected by the continued extension of lead times for electronic components and materials.」

「The leisure segment improved as visitors returned to amusement parks. However, the manufacturing segment for the manufacturing industry posted lower revenue and profit year on year because its mainstay cosmetic emulsification equipment and agitators were between periods of large-scale deliveries, and capital investment was reviewed due to shortages of construction materials. The construction industry segment was significantly affected by longer lead times for electronic components and materials, also resulting in lower revenue and profit year on year.」

「The M&T business, which is expected to become the Group's core business, is significantly affected mainly by trends in domestic economic conditions and has been forced to scale back its operations since 2020 due to the damage inflicted on economies in Japan and overseas by the spread of COVID-19.」

「Although the spread of infections had begun to subside following measures implemented by countries to prevent further transmission, a third wave emerged from the end of the year, including as new variants of the virus appeared. Although countries successively introduced measures to prevent further transmission and economic support measures, including vaccine development and vaccination and stricter lockdowns, economic activity remained at risk of stagnating again, both globally and domestically.」

「During the second quarter, the global economy suffered a severe blow from the developed to emerging economies as the COVID-19 pandemic spread worldwide, resulting in an unprecedentedly rapid contraction. Although the spread of infections had begun to subside following lockdowns in major metropolitan areas and requests to “stay home,” signs of a second wave were emerging. While countries successively introduced economic support measures, a full recovery of economic activity remained a long way off, both globally and domestically.」

「During the first quarter, the global economy suffered a severe blow from the developed to emerging economies as the COVID-19 pandemic spread worldwide, resulting in an unprecedentedly rapid contraction. To prevent the spread of infection, lockdowns were imposed in major metropolitan areas, including the principal economic centers of developed countries, together with requests to “stay home.” At the peak, economic activity was almost completely suspended. Economic activity has since been gradually resumed while monitoring the spread of infection, but the pace of infections has not subsided, and a full recovery of economic activity remains a long way off, both globally and domestically.」

「During the third quarter, the global economy remained supported by favorable employment conditions in the United States, although concerns about the economic outlook were spreading. In Europe, manufacturing remained sluggish and downside risks to the economy were a concern. In China, the economic slowdown was intensifying as trade negotiations with the United States dragged on. Escalating tensions between Iran and the United States in the Middle East also became a source of concern for the global economic outlook. Against this backdrop, employment conditions in Japan remained favorable on the strength of domestic demand, but uncertainty about the economic outlook continued to increase amid the global slowdown, sluggish exports and the impact of the consumption tax increase.」

「During the second quarter, the global economy remained supported by favorable employment conditions in the United States, although concerns about the economic outlook were spreading. In Europe, manufacturing remained sluggish and downside risks to the economy were a concern. In China, the economic slowdown was intensifying as trade negotiations with the United States dragged on. Against this backdrop, although exports in Japan remained sluggish, employment conditions and firm consumption were maintained on the strength of domestic demand, while sentiment about the economic outlook continued to deteriorate, with some expressing concern about the impact of the global slowdown and the consumption tax increase.」

「During the first quarter, the global economy continued to grow at a moderate pace in the United States, where favorable employment conditions persisted, while Europe showed signs of recovery. In China, however, concerns about an economic slowdown grew as the United States and China exchanged punitive tariffs. The prolonged US-China trade tensions, the UK's EU withdrawal negotiations with no clear resolution in sight, and geopolitical risks centered on North Korea and the Middle East, including Iran, increased uncertainty about the outlook for the global economy. Against this backdrop, although exports in Japan remained sluggish, employment conditions and firm consumption were maintained on the strength of domestic demand, while sentiment about the economic outlook continued to deteriorate.」

「During the fiscal year, economic conditions remained firm in the United States, where favorable employment conditions continued, while concerns about a slowdown in Europe increased. Trade issues originating in the United States continued to escalate in China, and geopolitical risks centered on North Korea and the Middle East, together with the increasingly confused situation surrounding the UK's withdrawal from the EU, caused uncertainty about the outlook for the global economy to grow.」

「During the third quarter, economic conditions remained firm in the United States, where favorable employment conditions continued, while concerns about an economic slowdown were increasing in Europe. Trade issues originating in the United States continued to escalate in China, and together with geopolitical risks centered on North Korea and the Middle East and the issue of the UK's deadline for leaving the EU, this left the outlook for the global economy uncertain, as illustrated by the sharp decline in market conditions at year-end.」

「During the second quarter, the global economy remained firm in the United States as employment conditions continued to improve, while Europe continued to recover moderately. In China, concerns about an economic slowdown were increasing as trade issues originating in the United States escalated. Together with geopolitical risks centered on North Korea and the Middle East and the issue of the UK's deadline for leaving the EU, this left the outlook for the global economy uncertain.」

「During the first quarter, the global economy remained firm in the United States as employment conditions continued to improve, while Europe continued to recover moderately and exports remained firm in China. Meanwhile, concerns about geopolitical risks centered on North Korea and the Middle East, trade issues originating in the United States, and the UK's withdrawal from the EU made the outlook uncertain. Against this backdrop, Japan's economy maintained a recovery trend, supported by firm exports and improving employment conditions.」

「During the third quarter, the global economy remained firm in the United States, where employment conditions continued to improve, while Europe continued to expand moderately amid rising geopolitical risk, particularly related to North Korea. In China, exports and personal consumption were strong, but the economy entered a moderate slowdown phase due to environmental regulations affecting industry, tighter monetary policy and reduced infrastructure investment. In Japan, corporate activity and personal consumption showed signs of recovery against a backdrop of increased exports resulting from the global economic recovery and favorable employment conditions, and the economy maintained a moderate recovery trend.」

「During the second quarter, the global economy remained firm in the United States, where employment conditions continued to improve, while Europe continued to expand moderately amid rising geopolitical risk, particularly related to North Korea. Although personal consumption in China remained firm, underlying economic activity was beginning to weaken somewhat. In Japan, corporate activity and personal consumption began to recover against a backdrop of increased exports resulting from the global economic recovery and favorable employment conditions, and the economy maintained a moderate recovery trend.」

「During the first quarter, the global economy remained firm in the United States as employment conditions continued to improve. In Europe, despite the issue of the UK's withdrawal from the EU, political risk in Europe temporarily receded as the political situation in France stabilized, and a moderate recovery continued. In China, retail sales and production remained resilient, while exports also remained firm. In Japan, corporate capital investment began to improve, and personal consumption began to recover against a backdrop of favorable employment conditions, leaving the economy on a moderate recovery track.」

「During the fiscal year, the global economy remained firm in the United States, led by personal consumption, while Europe continued to recover moderately despite the issue of the UK's withdrawal from the EU. In China, concerns about an economic slowdown that had prevailed at the start of the fiscal year showed signs of easing. Japan's economy was on a moderate recovery track, as corporate capital investment began to improve and personal consumption also began to recover against a backdrop of favorable employment conditions.」

「In Europe, the issue of the UK's withdrawal from the EU remained, while China's economy continued to slow due in part to sluggish exports. Japan's economy was on a moderate recovery track, and although the yen appreciated temporarily, it turned sharply weaker in the consolidated third quarter, providing a positive factor for improvements in corporate earnings.」

「Although Japan's economy was on a moderate recovery track, the yen continued to appreciate during the second quarter, and uncertainty about the economic outlook remained amid concerns about the impact on corporate earnings and other factors.」

「In Europe, uncertainty about the outlook prevailed, including following the approval of the UK's withdrawal from the EU in a referendum. In China, the economy clearly slowed, due in part to sluggish exports. In Japan, the yen appreciated further in the first quarter, and the outlook for the economy remained uncertain amid concerns about the impact on corporate earnings and sluggish personal consumption.」

「The land-based businesses are significantly affected mainly by trends in domestic economic conditions. Construction machinery for building work is affected by demand for high-rise condominiums and office buildings, while machinery parts manufacturing, machinery manufacturing for cosmetics, automotive parts manufacturing, air-conditioning and plumbing work, and foundry machinery manufacturing are affected by demand trends in Japan's manufacturing sector.」