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Small and Medium Enterprise Agency The 148th Survey of SME Business Conditions (April-June 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 approximately 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 April-June 2017 period and the forecasts (DIs) for the July-September 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 are improving moderately.

  1. From April to June 2017, the business conditions DI for all industries was -14.3(a 2.7-point increase compared to the previous quarter), marking two consecutive quarters of increase.
  2. The business conditions DI for the manufacturing sector was -10.6(a 2.4-point increase compared to the previous quarter), marking four consecutive quarters of increase. Looking at the business conditions DI of each industry, improvements were seen in nine industries: stone and clay products, chemicals, machinery equipment, metal products, textiles, food, wood and wooden products, iron & steel and non-ferrous metals, and electrical & information communication equipment and electronic parts industries, while decreases were seen in the DIs for five industries: namely, the transportation equipment, pulp & paper and paper products, printing, other manufacturing industries, and furniture and accessories industries.
    • (Reference)Example of comments from companies surveyed
      - The demand for manufacturing devices is growing in response to the strong performance of the semiconductor market. We expect steady growth in semiconductor demand, mainly in the field of IT, and it will be necessary to fortify our production capacity.(Company in the stone and clay products industry in Yamagata Prefecture)
  3. The business conditions DI for the non-manufacturing sector was -15.5(increased by 2.9 points compared to the previous quarter), having increased for two consecutive quarters. Looking at the business conditions DI of each industry, it increased in all sectors, including the services, wholesale, retail, and construction sectors.
    • (Reference)Example of comments from surveyed companies
      - Our business conditions remain brisk thanks to good weather during the Golden Week holiday period this year. Following this, demand is steady and our customer orders for luxury items remain consistent with the past. This situation makes us feel that consumer confidence remains flat or is slightly improving.(Restaurant in the food industry in Aichi Prefecture)
  4. The financing DI of all industries was -11.4(increased by 1.7 points compared to the previous quarter), marking two consecutive quarters of increase, while the DI measuring long-term and short-term financing difficulty were -3.3(increased by 0.4 points compared to the previous quarter)and -1.0(increased by 0.7 points compared to the previous quarter), respectively, showing an improvement.

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; compared to the previous year) increased by 5.0 points from the previous quarter to 27.1, marking an increase for three consecutive quarters.
    In addition, the unit sales price/per-customer sales DI (calculated in the same way) also increased to -10.2 (a 4.0-point increase compared to the previous quarter) for two consecutive quarters, resulting in a profit (ordinary profit) DI (calculated in the same way) of -18.8 (a 6.4–point increase compared to the previous quarter), showing an increase.
  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; based on current quarter data) decreased by 1.0 point to -18.1, showing that labor shortages have grown for four consecutive quarters.
    Looking at DIs by industry, labor shortages have grown in all industries, including the wholesale industry with a DI of -11.6 (a 1.4–point decrease compared to the previous quarter), the service industry with a DI of -22.1 (a 1.2–point decrease compared to the previous quarter), and the construction industry with a DI of -26.6 (decreased by 1.0 points compared to the previous quarter).
    • (Reference) Example of comments from surveyed companies
      - In recent years, the construction industry has faced increasing difficulties in terms of securing experienced engineers. This labor shortage is having adverse impacts on accepting contracts, despite the signs of a robust economy seen in Japan. (Company in the construction industry in Shizuoka Prefecture)

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

Release date

June 27, 2017

Divisions in Charge

  • Research Office, Policy Planning Division, Business Environment Department, Small and Medium Enterprise Agency
  • Research Division, Planning Department, Organization for Small & Medium Enterprises and Regional Innovation, JAPAN

Related website

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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