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Small and Medium Enterprise AgencyThe 143rd Survey of SME Business Conditions (January–March 2016) Is Released

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 from commerce and industry, chambers of commerce, and researchers from the National Federation of Small Business Associations. The Small and Medium Enterprise Agency (SMEA) and the Organization jointly compiled the business achievements (diffusion indices, or DIs) of SMEs for the January–March 2016 period and the forecasts (DIs) for the April–June 2016 period concerning SME business conditions, sales amounts, ordinary profits, and other data. The SMEA and the Organization hereby release the results.

1. Key points of survey results

The recent business conditions of small and medium enterprises appear to show some weakness but are also improving slightly in certain areas.

  1. From January to March 2016, the business conditions DI for all industries was −18.1 (decreased by 3.0 points compared to the previous quarter), having decreased for the first time in three quarters.
  2. The business conditions DI for the manufacturing sector was −16.8 (decreased by 3.9 points compared to the previous quarter), decreasing for the second consecutive quarter. Looking at the business conditions DI of each industry, improvements were seen in six industries including the pulp, paper, and paper products industry, the chemical industry, the furniture and fixtures industries, and other manufacturing industries, while the DIs for eight industries including the transportation equipment industry, the iron & steel and non-ferrous metals industries, the ceramic, stone, and clay products industry, the textile industry, the printing industry, and the metal products industry decreased. (Reference) Comment from a surveyed company (example)
    Our production has been decreasing due to the slowdowns in the economies of China, the EU, and emerging countries. The orders we have received have also been on the decrease due to production shifts to overseas countries. [Company in the transportation equipment industry in Tochigi Prefecture]
  3. The business conditions DI of the non-manufacturing sector was −18.8 (decreased by 3.0 points compared to the previous quarter), having decreased for the first time in three quarters. Looking at the business conditions DI of each industry, it decreased in all of the following sectors: construction, retail, wholesale, and services.
    (Reference) Comment from a surveyed company (example)
    Winter clothes didn’t sell well because of the warm winter, and we conducted inventory clearance by holding sales and increasing discounts earlier than usual. Therefore, we failed to secure any profit. (Company in the retail sector in Akita Prefecture)
  4. The financing DI of all industries was −13.8 (decreased by 1.7 points compared to the previous quarter), having decreased for the first time in three quarters, while the DI measuring long-term financing difficulty and the DI measuring short-term financing difficulty were −4.4 (increased by 0.7 points compared to the previous quarter) and −1.9 (increased by 0.4 points compared to the previous quarter) respectively, showing a slight improvement.

2. Topics

  1. This quarter, the materials/goods unit purchase price DI (calculated by subtracting the number of items that decreased from the number of those that increased, year-on-year comparison) decreased by 8.0 points from the previous quarter to 22.6, decreasing for the third consecutive quarter, and it approached the January-March 2015 quarter’s level. On the other hand, the unit sales price / per-customer sales DI (calculated in the same way) decreased to −13.5 (decreased by 3.5 points compared to the previous quarter). Also, the profit (ordinary profit) DI (calculated in the same way) was −25.6 (increased 3.3 points compared to the previous quarter), having decreased as well.)
    (Reference) Comment from a surveyed company (example)
    Our business conditions have been favorable because costs for both materials and electricity have been on the decrease and we are not facing urgent pressure for the reduction of our products’ prices. However, the orders we have received have remained sluggish. [Company in the chemistry industry in Hyogo Prefecture]
  2. The DI for excess/lack of employees (calculated by subtracting the number of items for which employees are lacking from the number of those for which employees are in excess, year-on-year comparison) in all industries increased by 0.6 points to −14.0, which shows that labor shortages were mitigated for the first time in three quarters. Looking at DIs by industry, labor shortages were mitigated in 4 industries including the construction industry, with a DI of −20.6 (decreased by 3.2 points compared to the previous quarter) in the construction industry, and there was a slight shortage in the wholesale sector, with a DI of −8.4 (decreased by 0.9 points compared to the previous quarter).

Note: DIs are calculated on a seasonally-adjusted quarter-on-quarter basis unless otherwise specified.

 Release date

March 29, 2016

Divisions in Charge

Research Office, Policy Planning Division, Business Environment Department, SMEA

Business Support Information Center, Organization for Small and Medium Enterprises and Regional Innovation

Related Information

Data Reports
Ministry of Economy, Trade and Industry1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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