Photo/Illutration The Shinkansen platform at JR Tokyo Station is crowded with families and passengers with large luggage on April 29 as the Golden Week holiday period this year was the first time in three years that restrictions on activities were not imposed. (Tatsuya Shimada)

A new survey found that more than half of major firms in Japan believe that the nation's economy is expanding, although an overwhelming number fear the impact of rising prices. 

In the survey, conducted by The Asahi Shimbun, the firms reported that the lifting of novel coronavirus restrictions on social activities has led to a resumption of economic and social activities and consumer spending is growing.

However, an emerging concern is the speed of rising prices for crude oil and raw materials following Russia’s invasion of Ukraine.

The Asahi Shimbun has been conducting the survey on how major firms view the domestic economy twice annually. The most recent survey was carried out from May 30 to June 10.

In the findings, 61 of 100 leading companies from across Japan said the domestic economy is “expanding” or “expanding moderately.”

Breaking the number down, 59 said the economy is expanding moderately while two said it is expanding. Thirty-seven said it is leveling off, while only one firm said it is receding moderately.

When asked to choose up to two reasons why they feel the economy is expanding, 53 of the 61 firms attributed it to consumer spending.

Retsu Togashi, executive managing officer of Mitsui Fudosan Co., said that hotel occupancy rates have returned to pre-pandemic levels.

“Reservations during the summer vacation period are coming in at a much faster pace than the past two years during the pandemic,” he said.

The government lifted pre-emergency measures to prevent the spread of COVID-19 across Japan in March. It is gradually easing restrictions on foreign visitors entering the country.

Kazuo Sato, managing executive officer of Nippon Life Insurance Co., expressed optimism, saying, “If the restrictions on activities continue to be lifted, personal consumption will recover on the back of high levels of savings.”

When asked about the outlook for consumer spending over the next three months, 66 firms said it will recover.

But the number was down from 75 who expressed confidence in the previous survey conducted last fall. The number of firms that expect consumer spending will continue to seesaw increased by seven.

When asked to choose up to two concerns about the domestic economy, 12 firms cited, “the prolonged impact of the coronavirus pandemic,” down sharply from the previous 67. The concern had been at the top in the four previous surveys since 2020.

On the other hand, the largest number of firms, 76, cited "rising prices for oil and raw materials," up more than 50 percent from the previous 49. This was the top concern this time.

Fifty-four firms said that they plan to or may raise prices from June to December following the soaring prices of raw materials and natural resources.