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Joint Press Release with the Organization for Small and Medium Enterprises and Regional Innovation
Small and Medium Enterprise Agency
The 136th Survey of SME Business Conditions (April–June 2014)

The Survey of SME Business Conditions is a quarterly survey conducted by the Organization for Small and Medium Enterprises and Regional Innovation, targeting about 19,000 small and medium enterprises (SMEs) across Japan in cooperation with business management advisors of the societies of commerce and industry, and chambers of commerce as well as researchers of the National Federation of Small Business Associations.

The Small and Medium Enterprise Agency and the organization jointly compiled the business achievements (DI) of SMEs in the April–June 2014 period and the forecasts (DI) for the July-September 2014 period concerning SME business conditions, sales amount, ordinary profits and other elements. They hereby release the results.

1. Key survey results

The recent business conditions of small and medium enterprises have deteriorated, but are beginning to move toward improvement in terms of future outlook.

  • The business conditions DI (diffusion index) of all industries showed an increase in the negative gap for the first time in three quarters.
  • Looking at the business conditions DI of each industry, the negative gap of the manufacturing sector increased for the first time in six quarters, and that of the non-manufacturing sector also increased for the first time in three quarters.
  1. From April to June 2014, the business conditions DI of all industries deteriorated by 12.1 percentage points from minus 11.1 in the preceding quarter to minus 23.2, which means that the negative gap increased.
  2. The business conditions DI of the manufacturing sector deteriorated by 15.7 percentage points from minus 2.6 in the preceding quarter to minus 18.3, which means the negative gap increased. Looking at the business conditions DI of each industry, the positive value turned into a negative value in seven industries, including the lumber and wood products, iron & steel and non-ferrous metals, chemicals, and furniture and fixtures industries, while the negative gap increased in seven industries, including the other manufacturing, printing, electrical & information communication equipment and electronic parts, and pulp, paper and paper products industries.
  3. The business conditions DI of the non-manufacturing sector deteriorated by 10.7 percentage points from minus 14.0 in the preceding quarter to minus 24.7, which means that the negative gap increased. Looking at the business conditions DI of each industry, the positive value turned to a negative value in the construction industry, while the negative gap increased in three industries, namely, the wholesale, retail and service sectors.
  4. The financing DI of all industries deteriorated by 4.1 percentage points from minus 12.2 in the preceding quarter to minus 16.3, while the DI measuring long-term financing difficulty also decreased by 0.4 percentage points from minus 6.7 in the preceding quarter to minus 7.1, which means that the negative gap increased. The DI of short-term financing difficulty also deteriorated by 0.6 percentage points from minus 3.9 in the preceding quarter to minus 4.5, which means that the negative gap decreased.

2. Topics

  1. In this quarter, the positive gap of the materials/goods purchase unit prices DI (increase to decrease on a year-on-year basis) increased for the sixth consecutive quarter, by 11.0 percentage points from 39.4 in the preceding quarter to 50.4, while the unit sales price/per-customer sales DI (increase to decrease on a year-on-year basis) improved by 3.9 percentage points, from minus 12.5 in the preceding quarter to minus 8.6, which means the negative gap decreased. In addition, the profit (ordinary profit) DI (increase to decrease on a year-on-year basis) deteriorated by 2.8 percentage points, from minus 22.6 in the preceding quarter to minus 25.4, which means that the negative gaps decreased. A price increase in raw materials and other factors due to the depreciation of the yen should be closely and continuously monitored.
  2. The DI for excess/lack (excess to lack at the level of the current quarter) of employees in all industries has been decreasing from mid-2012 to early 2014. In this quarter, some industries turned upward from the previous quarter, but looking at the all-industries basis, it still stood at minus 10.0, showing a state of labor shortage. Looking at each industry, the construction and service industries especially show a sense of labor shortage.

Note: The DI is calculated on a seasonally-adjusted quarter-on-quarter basis unless otherwise specified.

For further details, see the Japanese language press release.

Release Date

June 27, 2014

Division in Charge

  • Research Office, Policy Planning Division, Business Environment Department, Small and Medium Enterprise Agency
  • Business Support Information Center, Organization for Small and Medium Enterprises and Regional Innovation
Ministry of Economy, Trade and Industry
1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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