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Small and Medium Enterprise Agency The 147th Survey of SME Business Conditions (January-March 2017) 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 achievement diffusion indices (or DIs) of SMEs for the January-March 2017 period and the forecasts (DIs) for the April-June 2017 period concerning SME business conditions, sales amounts, ordinary profits, and other data. The SMEA and the organization hereby release the results.

1. Key survey results

The recent business conditions of small and medium enterprises show signs of picking up, while some sectors appear to remain stalled.

  1. From January to March 2017, the business conditions DI for all industries was - 17.0 (increased by 1.7 points compared to the previous quarter), marking an increase for the first time in two quarters.
  2. The business conditions DI for the manufacturing sector was - 13.0 (a 2.5 point increase compared to the previous quarter), having increased for three consecutive quarters. Looking at the business conditions DI of each industry, improvements were seen in 10 industries, including the iron & steel and non-ferrous metals; transportation equipment; wood and wooden products; furniture and accessories; printing; chemical; electrical and information communication equipment and electronic parts; metal products; machinery equipment; and stone and clay products industries, while the DIs for the four industries of pulp, paper and paper products, food, textiles, and other manufacturing industries decreased.
(Reference) Example of comments from surveyed companies
We are facing a steep increase in the number of new orders received in this quarter, making it difficult to maintain leeway for enhancing business investment. The current situation is expected to continue until around July 2017. (Company in the machinery equipment industry in Tochigi Prefecture)
  1. The business conditions DI for the non-manufacturing sector was - 18.4 (a 1.2 point increase compared to the previous quarter), marking the first increase in two quarters. Looking at the business conditions DI for each industry, it increased in all sectors of the wholesale, construction, services and retail sectors.
(Reference) Example of comments from surveyed companies
Movements toward business investment are picking up in the manufacturing industry, and demand for factory-automation-related machinery is also picking up. We have been receiving active inquiries for orders for the next fiscal year, so we expect better prospects for profits then. (Company in the wholesale industry in Shimane Prefecture)
  1. The financing DI of all industries was - 13.1 (a 0.8 point increase compared to the previous quarter), while the DI measuring long-term financing difficulty and the DI measuring short-term financing difficulty were - 3.7 (remaining the same as the previous quarter, i.e., a 0.0 point change) and - 1.7 (a 0.1 point decrease compared to the previous quarter) respectively.

2. Topics

  1. This quarter, the materials/goods unit purchase price DI (calculated by subtracting the number of items with decreased prices from the number of those with increased prices; based on current quarter data) increased by 1.6 points from the previous quarter to 22.1, marking an increase for two consecutive quarters.

On the other hand, the unit sales price/per-customer sales DI (calculated in the same way) also increased to - 14.2 (a 1.4 point increase compared to the previous quarter) for the first time in three quarters, resulting in a profit (ordinary profit) DI (calculated in the same way) of - 25.2 (a 0.2 point increase compared to the previous quarter), marking a slight increase.

(Reference) Example of comments from surveyed companies
We finally concluded negotiations on a price increase with our customers in order to adjust for the high price of raw materials, but now face slower sales due to this increase. (Company in the food industry in Wakayama Prefecture)
  1. 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) decreased by 0.9 points to - 17.1, showing that labor shortages have grown for three consecutive quarters.

Looking at DIs by industry, labor shortages have grown in particular in the manufacturing industry with a DI of - 15.7 (a 2.2 point decrease compared to the previous quarter), the service industry with a DI of - 20.9 (a 0.9 point decrease compared to the previous quarter), and the retail industry with a DI of - 10.4 (a 0.8 point decrease compared to the previous quarter), showing that labor shortages have grown.

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

Release date

March 28, 2017

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

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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