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Small and Medium Enterprise Agency The 149th Survey of SME Business Conditions (July-September 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 July-September 2017 period and the forecasted DIs for the October-December 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 improvement, while some sectors appear to remain stalled.

(1)From July to September 2017, the business conditions DI for all industries was -14.8 (a 0.5 point decrease compared to the previous quarter), having decreased for the first time in three quarters.

(2)The business conditions DI for the manufacturing sector was -11.2 (a 0.6 point decrease compared to the previous quarter), having decreased for the first time in five quarters. Looking at the business conditions DI of each industry, improvements were seen in eight industries: the pulp, paper and paper products, transportation equipment, electrical & information communication equipment, printing, other manufacturing, chemical, textile, and metal products industries, while the DIs for six industries (the stone and clay products, wood and wooden products, food, iron & steel and non-ferrous metals, machinery equipment, and furniture and accessories industries) decreased.

(Reference) An example comment from surveyed companies

  • We continue receiving a large number of orders, and also have been actively pursuing inquiries for orders. However, we have been struggling to secure experienced engineers and face a labor shortage. This situation makes it difficult for us to meet delivery dates, causing us to lose business opportunities. (Company in the transportation equipment industry in Mie Prefecture)

(3)The business conditions DI for the non-manufacturing sector was -15.9 (a 0.4 point decrease compared to the previous quarter), having decreased for the first time in three quarters. Looking at the business conditions DI of each industry, improvements were seen in the wholesale industry, while the DIs decreased in the construction, retail trade and service industries.

(Reference) An example comment from surveyed companies

  • The number of customers dramatically decreased due to the impact of the heavy rain in July. We will strive to take advantage of the sightseeing season for fall foliage to recover the lost numbers. (Company in the accommodations industry in Fukuoka Prefecture)

(4)The financing DI of all industries was -11.3 (a 0.1 point increase compared to the previous quarter), having increased for three consecutive quarters, while the DI measuring long-term financing difficulty and the DI measuring short-term financing difficulty were -2.4 (a 0.9 point increase compared to the previous quarter) and -0.3 (a 0.7 point increase 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 that decreased from the number of those that increased, year-on-year comparison) decreased by 1.2 points from the previous quarter to 25.9, showing a decrease for the first time in four quarters.

On the other hand, the unit sales price/per-customer sales DI (calculated in the same way) increased to -9.5 (a 0.7 point increase compared to the previous quarter) for three consecutive quarters, resulting in a profit (ordinary profit) DI (calculated in the same way) of -19.2 (a 0.4 point decrease compared to the previous quarter), showing a decrease.

(Reference) An example comment from surveyed companies

  • It is difficult to secure the products that we sell due to the decrease in the amount of catches of fish and the increase in purchase prices. We barely gain profits from sales or have no choice but to raise sales prices, so we are concerned about losing customers. (Company in the food industry in Aomori 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, level of the current quarter) decreased by 0.6 points to -18.7, showing that labor shortages have grown for five consecutive quarters.

Looking at the DIs by industry, labor shortages have grown in particular in the following four industries: the retail sales industry with a DI of -10.5 (a 0.8 point increase compared to the previous quarter), the construction industry with that of -30.2 (a 3.6 point decrease from the previous quarter), and the wholesale industry with that of -12.7 (a 1.1 point decrease from the previous quarter).

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

Release date

September 28, 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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