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Small and Medium Enterprise Agency The 144th Survey of SME Business Conditions (April-June 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 April-June 2016 period and the forecasts (DIs) for the July-September 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 amid improving trends.

  1. From April to June 2016, the business conditions DI for all industries was -19.5 (a decrease of 1.4 points compared to the previous quarter), having decreased for the second consecutive quarter.
  2. The business conditions DI for the manufacturing sector was -16.9 (a decrease of 0.1 points compared to the previous quarter), decreasing slightly for the third consecutive quarter. Looking at the business conditions DI of each industry, improvements were seen in eight industries including the ceramic, stone, and clay products industry, the textile industry, the printing industry, the wood and wood products industry, the information and communication electronics equipment industry, and the electronic parts industry, while decreases were seen in six industries including the chemicals industry, the furniture and fixtures industries, the machinery industry, and the transportation equipment industry.
    (Reference) Comment from a surveyed company (example)
    • Automobile companies’ suspension of production of light vehicles has caused surplus man-hours in some production lines. However, we are reviewing personnel allocation and trying to reduce overtime work as a whole to reduce costs. [Company in the transportation equipment industry in Okayama Prefecture]
  3. The business conditions DI for the non-manufacturing sector was -20.4 (a decrease of 1.6 points compared to the previous quarter), having decreased for the second consecutive quarter. Looking at the business conditions DI of each industry, it remained flat in the construction industry, while decreases were seen in the wholesale industry, the services industry, and the retail industry.
    (Reference) Comment from a surveyed company (example)
    • Due to the Kumamoto Earthquake in April, tourists on weekends decreased. Tourists are coming back gradually, but our sales are low compared to last year. [Company in the food service industry in Oita Prefecture]
  4. The financing DI of all industries was -13.9 (a decrease of 0.1 points compared to the previous quarter), having decreased slightly for the second consecutive quarter, while the DI measuring long-term financing difficulty and the DI measuring short-term financing difficulty were -4.5 (a decrease of 0.1 points compared to the previous quarter) and -2.2 (a decrease of 0.3 points compared to the previous quarter) respectively, showing a slight decline.

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 1.7 points from the previous quarter to 20.9, decreasing for the fourth consecutive quarter.

On the other hand, the unit sales price / per-customer sales DI (calculated in the same way) slightly increased by 0.1 points compared to the previous quarter to -13.4, and the profit (ordinary profit) DI (calculated in the same way) also increased to -24.1 (up by 1.5 points compared to the previous quarter).

(Reference) Comment from a surveyed company (example)
Shipments are decreasing due to a decline in demand, but higher product prices have offset such decreases and higher material costs, and our business conditions are becoming favorable. [Company in the ceramic, stone, and clay products industry in Hokkaido]

(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 0.7 points compared to the previous quarter to -13.3, showing that labor shortages were mitigated for the second consecutive quarter.

Looking at DIs by industry, labor shortages were mitigated in two industries including the manufacturing industry, which showed a DI of -8.5 (an increase by 2.9 points compared to the previous quarter), while labor shortages intensified in three industries including the wholesale industry, which showed a DI of -9.1 (a decrease by 1.0 points compared to the previous quarter).

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

Release date

June 28, 2016

Divisions 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

Related Information

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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