By Daniel Leussink and Leika Kihara

TOKYO (Reuters) – Japan’s service sector sentiment rose in September to the highest level in 2-1/2 years, government data showed on Thursday, suggesting that the economy is gradually recovering from the devastating impact of the coronavirus pandemic.

A survey of workers such as taxi drivers, hotel workers and restaurant staff – called “economy watchers” for their proximity to consumer and retail trends – showed their confidence about current economic conditions grew 5.4 points from August to 49.3 in September.

It was the highest level since April 2018 and the fifth straight month of increase, boding well for the government’s efforts to prevent a pandemic-driven recession from deepening.

“While conditions remain severe due to the pandemic’s fallout, sentiment is improving,” the government said on the survey. “While there are concerns over the pandemic, sentiment is likely to continue recovering,” it said.

A separate private survey showed the flood of money pumped out by the government and central bank is keeping companies afloat for now, despite the hit to sales from the pandemic.

The number of corporate bankruptcies totalled 3,956 cases in the first half of the fiscal year that began in April, down 5.2% from the same period last year and the lowest level in nearly 16 years, private think-tank Teikoku Databank said on Thursday.

Total liabilities for firms that went under stood at 601.25 billion yen ($5.67 billion), the second-lowest level on record, the report from Teikoku Databank showed.

The Bank of Japan has ramped up stimulus twice so far this year and created a lending facility to channel funds via banks to cash-strapped smaller firms.

The government also deployed two massive spending packages, and offered cheap loans backed by state-affiliated lenders to help companies weather the hit from the health crisis.

Japan suffered

PARIS (Reuters) – Global airlines warned on Tuesday that the coronavirus-stricken industry was on course to burn through another $77 billion in cash in the second half of 2020, calling on governments to renew expiring wage support programmes.



a large air plane on a runway: FILE PHOTO: Outbreak of the coronavirus disease (COVID-19) in Santiago


© Reuters/Ivan Alvarado
FILE PHOTO: Outbreak of the coronavirus disease (COVID-19) in Santiago

“The issue now is that aid, particularly the wage subsidies, is starting to be withdrawn,” Brian Pearce, chief economist at the International Air Transport Association (IATA), told reporters.

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Airlines consumed $51 billion in cash in the second quarter as the pandemic brought global travel to a near-standstill, the industry body said.

The call for increased support came as U.S. airlines begin furloughs of more than 32,000 workers amid fading hopes for a new federal bailout package. Wage support programmes are also tapering off in Europe and elsewhere.

Whereas the withdrawal of subsidies makes sense for sectors in recovery, IATA warned of further airline bankruptcies in the northern hemisphere winter as the collapse in revenue continues to dwarf cost savings. The average carrier now has cash for 8.5 months of operations, Pearce said.

“We’re facing some tough winter months for airlines when cash flows are always seasonally weak,” he said. “We’re looking (at) airlines getting into trouble if not failing without either further government support or (being) able to access capital markets for more cash.”

Airlines are pushing for a global system of pre-flight COVID-19 tests to replace quarantines and travel restrictions they blame for worsening the travel collapse.

(Reporting by Laurence Frost; Editing by Kirsten Donovan)

Source Article

Retail bankruptcies, liquidations and store closings in the U.S. reached records in the first half of 2020 as the Covid-19 pandemic accelerated industry changes, particularly the shift to online shopping, according to according to a report by professional-services firm BDO USA LLP.

In the first six months, 18 major retailers filed for chapter 11 protection, mostly concentrated in apparel and footwear, home furnishings, grocery and department stores, according to the report. They include department-store operators Neiman Marcus Group Ltd., J.C. Penney Co.
JCPNQ,
+3.86%

  and Stage Stores Inc.
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-8.39%

 , home-goods retailers Pier 1 Imports Inc.
PIRRQ,
+4.34%

 and Tuesday Morning Corp. and vitamin seller GNC Holdings Inc.

From July through mid-August, 11 more retailers filed, including apparel retailers Lucky Brand Dungarees LLC, Brooks Brothers Inc., Ann Taylor parent Ascena Retail Group Inc.
ASNAQ,
+10.02%

 , Stein Mart Inc., and Men’s Wearhouse and Jos. A. Bank parent Tailored Brands Inc.
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-1.31%

 

This year is on pace to rival 2010, when 48 retailers filed for bankruptcy in the wake of the 2007-09 recession, BDO said. Retail bankruptcies in 2020 have already surpassed the 22 such filings recorded last year.

“This is almost certainly the worst year in recent history for retail,” said Kyle Sturgeon, a managing partner at Atlanta-based turnaround advisory firm Meru LLC.

Government-mandated store closures and social-distancing measures have intensified challenges that were facing bricks-and-mortar retailers before the pandemic, according to BDO.

Consumers stuck at home due to the pandemic are buying more online than ever, the report said. That trend comes on top of excessive debt, store saturation, high unemployment and changing shopper behaviors. Demand for business attire and outfits for social occasions, in particular, has cratered.

High rates of bricks-and-mortar store closures are expected to continue, BDO said. From January through mid-August, retailers had announced