Japanese-owned factories are back up and running across the nation, but most are operating with reduced staff as they wait for the appropriate time to bring back their full teams.
In its fourth “short survey” since the pandemic began, the Japan External Trade Organization found that the majority of Japanese subsidiaries — in manufacturing and other sectors — are still finding it challenging to procure personal protective equipment and navigate the rules for reopening.
COVID-19 case numbers are mounting in many states across the South with increased testing and relaxed restrictions.
At the same time, the survey showed that many Japanese firms are becoming more comfortable with remote working after making an abrupt shift in March and April, when lockdowns were mandated and many “non-essential” businesses were forced to shut their doors. Twenty percent of non-manufacturers plan to mandate remote working at least through 2020 for some, while offering it as an option for others.
The survey covered 834 firms, with 277 from the Southern U.S., home to many Japanese suppliers in the automotive field and other sectors. More than half off the respondents, or 461, were manufacturers.
JETRO found that nearly 40 percent of manufacturers plan to bring all staff back by the end of the year, but for non-manufacturers, that stood at about 19 percent. In both categories, a quarter of companies said they would have employees rotate in shifts, presumably to adhere to keep distancing guidelines.
The uncertainty did come with a definite positive sign: the proportion of Japanese-owned factories with production completely paused fell from 28.2 percent to 3 percent since April, showing how the economy has revived after lockdowns were relaxed.
Still, some 80 percent of factories show reduced capacity, with the biggest slice (46.8 percent) having cut between 30 and 80 percent of output versus May 2019. Nine out of 10 said the cuts were due to sales pummeled by the pandemic.
Faced with high shipping costs and disruptions to their supply chains, some 30 percent of the overall respondents said they would re-evaluate how they get parts and components to the United States. Of that minority, over 58 percent pegged the reasoning to the COVID-19 upheaval’s affect on countries of their suppliers, but nearly half of those engaging in re-evaluation said it was due to the U.S.-China trade war.
Read the full survey results here.
