Risk of economic deterioration, weaker construction demand and construction delays due to the spread of COVID-19

「If an event causing major global changes in economic conditions occurs, such as a financial panic or the spread of an infectious disease, the Group’s operating results and financial position could be affected, including through a substantial decline in demand for construction investment.」

「During the consolidated fiscal year under review, Japan's economy continued to show a gradual recovery, and progress was made toward normalizing economic and social activity in response to COVID-19. However, the impact of soaring resource prices and other prices has spread, partly because of Russia's invasion of Ukraine, and we believe uncertainty about the economic outlook has increased.」

「Although a moderate recovery has continued due to the recovery of overseas economies and domestic consumption, the impact of COVID-19 variants has recently been expanding, and the situation is considered unpredictable. In the construction industry to which the Company’s Group belongs, public investment remained solid, but signs of stagnation were seen in the recovery of demand in the private-sector building segment, requiring continued monitoring of trends.」

「During the cumulative first quarter of the fiscal year ending March 2022 (April to June 2021), the Japanese economy was in the process of a gradual recovery, supported by the recovery in overseas economies and expectations for the effects of wider vaccine coverage in Japan. However, the economy is expected to remain uneven for the time being owing to concerns about a renewed spread of infections.」

「In the construction industry in which our group operates, public investment remained solid, although some construction suspensions and postponed starts occurred. In addition, the recovery in demand in the private-sector building segment lacked momentum, and the outlook will need to be monitored carefully.」

「During the third quarter of the current consolidated fiscal year (April 2020 to December 2020), Japan’s economy declined significantly in both domestic and external demand due to the impact of COVID-19. Although signs of recovery were seen toward the end of 2020, the impact has recently been expanding again and the uncertain outlook continues. Meanwhile, in the construction industry to which the Company’s Group belongs, some construction stoppages and delays in starting work occurred, while private-sector orders have recently been weak, requiring close monitoring of future trends.」

「During the second quarter of the current consolidated fiscal year (April 2020 to September 2020), Japan’s economy declined significantly in both domestic and external demand due to the spread of COVID-19, and the outlook remained unpredictable because containment was not yet in sight, although signs of a recent recovery had emerged. Meanwhile, in the construction industry to which the Company’s Group belongs, construction progress was firm, particularly in urban areas, except for construction stoppages and delays in starting work at some sites. However, the Company will continue to closely monitor construction order trends, which have recently been weakening.」

「During the first quarter of the current consolidated fiscal year (April 2020 to June 2020), Japan’s economy declined sharply in both domestic and external demand due to the spread of COVID-19. Although signs of a bottoming out have emerged recently, uncertainty about the outlook has not been dispelled. Meanwhile, in the construction industry to which the Company’s Group belongs, construction progress remained firm, particularly in urban areas, although some sites experienced construction stoppages and delays in starting work.」

「The Company will closely monitor the deterioration in economic conditions caused by the spread of COVID-19 and its impact on construction demand, but at present there are no changes to the following management policies or views of the business environment.」