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Joint Press Release with the Organization for Small and Medium Enterprises and Regional Innovation
Small and Medium Enterprise Agency
The 137th Survey of SME Business Conditions (July-September 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 July–September 2014 period and the forecasts (DI) for the October–December 2014 period concerning SME business conditions, sales amounts, ordinary profits and other elements. They hereby release the results.

1. Key survey results

The recent business conditions of small and medium enterprises show signs of picking up, while some industries show weakness.

  • The business conditions DI (diffusion index) of all industries show a decrease in the negative gap.
  • Looking at the business conditions DI of each industry, the negative gap of both the manufacturing sector and the non-manufacturing sector decreased.
  1. From July to September 2014, the business conditions DI of all industries improved by 4.5 percentage points from minus 23.2 in the preceding quarter to minus 18.7, which means that the negative gap decreased.
  2. The business conditions DI of the manufacturing sector improved by 6.0 percentage points from minus 18.3 in the preceding quarter to minus 12.3, which means the negative gap decreased. Looking at the business conditions DI of each industry, the negative value turned into a positive value in the machinery industry, and the negative gap decreased in 11 industries, including pulp, paper and paper products, wood and wood products, iron & steel and non-ferrous metals, printing, and furniture and fixtures industries, while the negative gap increased in two industries, namely, the textile and transportation equipment sectors.
  3. The business conditions DI of the non-manufacturing sector improved by 4.1 percentage points from minus 24.7 in the preceding quarter to minus 20.6, which means the negative gap decreased. Looking at the business conditions DI of each industry, the negative gap decreased in three industries, namely, the wholesale, retail and service sectors, while that in the construction sector increased.
  4. The financing DI of all industries improved by 1.3 percentage points from minus 16.3 in the preceding quarter to minus 15.0, while the DI measuring long-term financing difficulty also improved by 0.3 percentage points from minus 7.1 in the preceding quarter to minus 6.8, which means the negative gap decreased. The DI of short-term financing difficulty also improved by 0.8 percentage points from minus 4.5 in the preceding quarter to minus 3.7, 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) decreased by 3.9 percentage points from 50.4 in the preceding quarter to 46.5, but it still remains at a high level. The unit sales price/per-customer sales DI (increase to decrease on a year-on-year basis) deteriorated by 1.5 percentage points, from minus 8.6 in the preceding quarter to minus 10.1, which means the negative gap increased. In addition, the profit (ordinary profit) DI (increase to decrease on a year-on-year basis) also deteriorated by 2.5 percentage points, from minus 25.4 in the preceding quarter to minus 27.9, which means that the negative gap increased. 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-2013 to early 2014. In this quarter, some industries turned upward from the preceding quarter, but looking at the all-industries basis, it deteriorated by 1.7 percentage points from minus 10.0 in the preceding quarter to minus 11.7, showing an increasing sense of labor shortage. Looking at each industry, the construction and service industries particularly showed a strong sense of labor shortage, indicating minus 21.6 and minus 15.7 respectively.

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

September 29, 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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