TOKYO — Top executives at Japan’s leading companies are concerned about the impact of a long shutdown due to the novel coronavirus to the continuity of their business, according to a Nikkei survey conducted last week, after the Japanese government declared a state of emergency.
The emergency declaration covers seven prefectures, including Tokyo and Osaka, and runs through May 6. Local authorities have asked people to avoid going out and have placed restrictions on some business activity. The emergency may be extended, depending on the trends in infections, potentially dealing a heavy blow to business.
The survey of 129 company presidents and chairmen revealed that just 3.2% are worried about the survival of their business if the state of emergency lasts for a month. But if it lasts two months, the figure rises to 7.4% and jumps to 22.1% if it stretches to three months. The share of those worried about their company’s survival reaches 44.3% if the emergency lasts up to half a year, and 50.6% if it continues for up to a year.
“The risk of a prolonged global outbreak cannot be denied,” said Isao Teshirogi, CEO of pharmaceutical company Shionogi & Co.
As to the main risks executives are dealing with, ensuring the health of employees topped the list at 90.6%. The second-biggest concern is stagnating business due to restrictions in movement, cited by 64.8% of respondents. Another 18% said cash flow is a problem. Of those who worry about cash flow, 34.8% said they have already secured funds, while 47.8% think they will be able to obtain the funding they need.
“There is no apparent risk at the moment, but we will diversify our funding sources in case of a long-term impact,” said a respondent from a leading construction company.