Business sentiment among workers in Japan with jobs sensitive to economic trends logged a record low for the second consecutive month in April as the novel coronavirus pandemic stalled the nation’s business activity, government data showed Wednesday.
The diffusion index of confidence among “economy watchers” such as taxi drivers and restaurant staff fell 6.3 points from the previous month to 7.9, the lowest level since comparable data became available in 2002.
The Cabinet Office downgraded its assessment for the third straight month, saying the economy, already in a quite severe situation following the coronavirus outbreak, is deteriorating further.
March’s headline figure of 14.2 was already below levels marked in the wake of the 2008-2009 global financial crisis and after the massive earthquake and tsunami that devastated northeastern Japan in 2011.
A reading below 50 indicates that more respondents reported worsening conditions than improving ones.
Japan’s economy has been hit hard by requests for people to stay at home and for businesses to suspend operations under a state of emergency initially declared by Prime Minister Shinzo Abe on April 7.
A worker at a restaurant in the Chugoku region in western Japan was quoted as saying that the movement of people has “completely stopped” due to the state of emergency, which was expanded to cover the whole nation on April 16, and the number of customers is approaching “nearly zero.”
Another at a construction company in the Kanto region including Tokyo reported that all of its planned projects such as repair work at a local elementary school were canceled.
As for the outlook, the economy watchers remained pessimistic, with the diffusion index gauging business sentiment regarding the coming months falling 2.2 points to 16.6, a record low.
“The coronavirus outbreak had a significant effect on the survey’s outcome, which showed remarkably poor figures that could not be imagined,” a Cabinet Office official told a news briefing. “I would like to believe that sentiment has hit bottom, but unfortunately the situation is so severe.”
The Cabinet Office polled 2,050 workers from April 25 to 30, of whom 1,790 or 87.3 percent responded.
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