A survey found that about 77 percent of Japanese companies in Europe see their operations impacted by the Russian invasion of Ukraine primarily due to increases in energy and food prices and disruptions to logistics.
Manufacturers are feeling the greater impact, with 83.7 percent of the industry saying their business has suffered from the war in Ukraine, according to the online survey of 1,445 companies conducted between September 2019 and 2018. 1 and 26 from the Japan External Trade Organization with valid responses from 799.
Of 605 companies that answered a multiple-choice question on the negative factors, 65.1 percent cited rising energy prices, 55.9 percent higher prices for raw materials and resources such as plastic and rubber products, while 54.0 percent cited disruptions and shortages in of logistics.
“The survey shows the severity of the impact of the Ukraine war on business operations,” said Akiko Ueda, a JETRO official.
“The fact that almost 80 percent of companies said they have negative feelings about the war in Ukraine underscores the situation in which they cannot avoid harm, even if they speed up efforts such as passing prices on to customers,” he said Ueda, adding the resolution Conflicts are “crucial” to improving the business environment.
The Ukraine crisis, triggered by Moscow’s invasion in February, has stagnated grain exports from the eastern European country, leading to rising food prices. According to JETRO, companies in the food industry as well as in the agricultural and fishery processing industry are particularly affected.
The auto industry also suffered as it had to reduce or discontinue its activities in Russia and experienced price increases for energy, raw materials and parts.
Of 501 companies that answered a question about countermeasures, 50.5 percent said they passed higher costs on to customers. About 27.5 percent have diversified their supplier base, while 25.1 percent have sought new customers. In the manufacturing sector, 29.4 percent said they had increased their inventories.
Among other concerns about the Ukraine crisis, companies cited the uncertain prospects for the end of hostilities and the resumption of business in Russia, the survey said.