Yano Research Institute Ltd. (the President, Takashi Mizukoshi) conducted a large-scale questionnaire to major company top management and key business persons at the forefront, aiming to forecast the impacts of new coronavirus (COVID-19) pandemic to current operating performance at companies and to anticipate business environments after the end of pandemic.

Summary of Research Results:

1. Influences of COVID-19 Pandemic to Full-Year Business Performance

If the pandemic ends within June, decline in the full-year sales is likely to remain at 8% from the sales budget. If it stays active until the Oct-Dec. 2020, the drop will reach at 27% (Figure 1). When observing accommodations and food & beverage services, the worst-affected industry, decrease in revenue can be 30% even if the pandemic terminates in June, and can even reach 54% if the pandemic fades only at the yearend (Figure 2).

Such deterioration in business performance directly stems from self-restraint of outing and reduced demand from temporary closure requested by the government accompanied by decreased orders among domestic buyers. In addition, restricted sales activities caused by telecommuting, and loss of business opportunities by suspension of events and exhibitions have also adversely affected the business performance.

2. New Attempts Triggered by COVID-19

55% of the respondents have replied about their implementation of telecommuting and telework. As adoption of flextime and discretionary labor systems (15% of respondents) and allowing of side jobs are in progress, workstyles seem to be somewhat diversifying.

In terms of business, the respondents are planning to review their business portfolio by reconsidering their production and sales structures and by examining business diversification. 38% of respondents have mentioned about their challenge of how to expand R&D expenses, while 34% pointed out the necessity of reevaluating the production in China.

3. How the World Changes

94% of respondents say that social digitization is to be accelerated, and competent new industries are to replace the unchangeable old ones. Also, many have commented that populist nationalism can be stabilized or strengthened (49%).

Rising hopes for stabilization and intention of expense-saving are expected to make the household economy more defensive. On the other hand, 41 % have mentioned that the provincial areas may be vitalized, as urban population density is likely to be recognized as a risk.

Research Outline:

• Research period: April 22 to May 18
• Online questionnaire to top management and business persons of major and mid-size companies
• Valid responses: 810

The strategic report on the detailed analysis from this questionnaire added with future forecasts by our senior executive researchers specialized in respective industries is to be published at the end of June. Sincerely hope that it would assist your company management plans and growth strategies.

<Contact>

Ikuo Shinagawa or Shogo Toma,

Future Project Planning

Yano Research Institute Ltd.

e-mail: mirai@yano.co.jp