The difficulties of coping with a dwindling and rapidly aging population in Japan were highlighted in a recent a Reuters poll on Japanese firms which say that over the next three years, a shrinking domestic demand is their biggest worry while labor shortages are a close second.
Even as Japan’s graying consumers, lacking confidence in the future, tend to scrimp and save rather than spend, efforts by policymakers to engineer a sustained economic recovery have been hindered for decades by the country’s demographic challenges.
The Reuters Corporate Survey showed that 40 percent of businesses cited the country's shrinking market when they were asked about what was their biggest concern over the next three years.
"The domestic market isn't expanding and there's nothing we can do about it," wrote a manager at an auto sector firm in the survey conducted June 2-15.
Japanese companies have bene forced to raise wages and in some cases even cut back on services offered by a lack of workers as population woes deepen and the problem of fewer customers is now being exacerbated by this lack of workers. The lack of workers was now their main concern, thirty-four percent of firms said.
"We're having trouble both in hiring new grads and with pulling in people mid-career, especially those with technical expertise," said a manager at a metals and machinery firm.
By announcing in April it would cut delivery volumes and hike prices because it did not have enough workers, delivery firm Yamato Holding Co is one of many firms that has grabbed headlines in recent times.
It is projected that the working-age population of Japan would tumble to 45.2 million by 2065, even as a 11 percent drop since its peak in 1995 was recorded 2015 when the working population number reached to 77.2 million as the country's working-age population shrunk.
While 26 percent of the firms taking part in the survey thought they wouldn't be able to secure sufficient staff over the next three years, most firms said they could be able to secure the sufficient numbers. With 40-45 percent of companies worried they would be left short of employees, by sector, IT services firms, transport as well as other services were the most pessimistic.
While 13 percent of the firms plan to hire foreign workers, a quarter of them saw wage hikes as a way to go while a majority - 48 percent said they would expand training and investment in human resources, in order to secure sufficient labor in the years to come.
Many other corporate concerns were far outstripped by all the worries about domestic demand and the lack of workers. While deflation, a state of falling prices that has long been the bete noire of Japanese authorities, gained just 5 percent support from the firms in the survey, trade stagnation due to protectionism only garnered 9 percent of the votes.
526 big and mid-sized businesses, who reply on condition of anonymity, were polled in the survey, conducted monthly for Reuters by Nikkei Research. Questions on their three-year outlook were answered by between 200 and 240 companies.
(Source:www.reuters.com)
Even as Japan’s graying consumers, lacking confidence in the future, tend to scrimp and save rather than spend, efforts by policymakers to engineer a sustained economic recovery have been hindered for decades by the country’s demographic challenges.
The Reuters Corporate Survey showed that 40 percent of businesses cited the country's shrinking market when they were asked about what was their biggest concern over the next three years.
"The domestic market isn't expanding and there's nothing we can do about it," wrote a manager at an auto sector firm in the survey conducted June 2-15.
Japanese companies have bene forced to raise wages and in some cases even cut back on services offered by a lack of workers as population woes deepen and the problem of fewer customers is now being exacerbated by this lack of workers. The lack of workers was now their main concern, thirty-four percent of firms said.
"We're having trouble both in hiring new grads and with pulling in people mid-career, especially those with technical expertise," said a manager at a metals and machinery firm.
By announcing in April it would cut delivery volumes and hike prices because it did not have enough workers, delivery firm Yamato Holding Co is one of many firms that has grabbed headlines in recent times.
It is projected that the working-age population of Japan would tumble to 45.2 million by 2065, even as a 11 percent drop since its peak in 1995 was recorded 2015 when the working population number reached to 77.2 million as the country's working-age population shrunk.
While 26 percent of the firms taking part in the survey thought they wouldn't be able to secure sufficient staff over the next three years, most firms said they could be able to secure the sufficient numbers. With 40-45 percent of companies worried they would be left short of employees, by sector, IT services firms, transport as well as other services were the most pessimistic.
While 13 percent of the firms plan to hire foreign workers, a quarter of them saw wage hikes as a way to go while a majority - 48 percent said they would expand training and investment in human resources, in order to secure sufficient labor in the years to come.
Many other corporate concerns were far outstripped by all the worries about domestic demand and the lack of workers. While deflation, a state of falling prices that has long been the bete noire of Japanese authorities, gained just 5 percent support from the firms in the survey, trade stagnation due to protectionism only garnered 9 percent of the votes.
526 big and mid-sized businesses, who reply on condition of anonymity, were polled in the survey, conducted monthly for Reuters by Nikkei Research. Questions on their three-year outlook were answered by between 200 and 240 companies.
(Source:www.reuters.com)
