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The Small and Medium Enterprise Agency The 150th Survey of SME Business Conditions(October-December 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 October-December 2017 period and the forecasted DIs for the January-March 2018 period concerning SME business conditions, sales amounts, ordinary profits, and other data. The SMEA and the organization hereby release the results.

Key survey results

The recent business conditions of small and medium enterprises show moderate improvement, while growth in some industries appears to stagnate.

(1)From October to December 2017, the business conditions DI for all industries was -14.4(a 0.4 point increase compared to the previous quarter), having increased for the first time in two quarters.

(2)The business conditions DI for the manufacturing sector was -7.9(a 3.3 point increase compared to the previous quarter), having increased for the first time in two quarters.

Looking at the business conditions DI of each industry, improvements were seen in 11 industries: the iron and steel, and non-ferrous metal, other manufacturing, transportation equipment, machinery equipment, metal products, electrical & information communication equipment and electronic parts, textile, pulp, paper and paper products, furniture and accessories, food, and printing industries, while the DIs for three industries decreased: the stone and clay products, chemical, and wood and wooden products industries.

(Reference)An example comment from surveyed companies

  • Backed by the active business condition in the machine tool industry, we are receiving so many orders that we tend to delay our delivery schedules. We would like to increase the volume of production, but cannot smoothly do so due to labor shortage. (Company in the iron and steel, and non-ferrous metal industry in Ishikawa Prefecture)

(3)The business conditions DI for the non-manufacturing sector was -16.6(a 0.7 point decrease compared to the previous quarter), having decreased for two consecutive quarters. Looking at the business conditions DI of each industry, improvements were seen in the construction industry, while the DIs decreased in the wholesale, service, and retail trade industries.

(Reference)An example comment from surveyed companies

  • As we target tourists, our sales largely depend on weather conditions. In this quarter, several typhoons arrived every weekend, and the number of customers dramatically decreased.(Company in the food industry in Kyoto Prefecture)

(4)The financing DI of all industries was -11.4(a 0.1 point decrease compared to the previous quarter), having decreased for the first time in four quarters, while the DI measuring long-term financing difficulty was -2.1(a 0.3 point increase compared the previous quarter), having increased for three consecutive quarters, and the DI measuring short-term financing difficulty was -0.3(remaining the same as those of the previous quarter, i.e., 0.0 points).

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)increased by 4.2 points from the previous quarter to 30.1, showing an increase for the first time in two quarters.
    On the other hand, the unit sales price/per-customer sales DI(calculated in the same way)decreased to -9.7(a 0.2 point decrease compared to the previous quarter) for the first time in four quarters, resulting in a profit(ordinary profit)DI(calculated in the same way) of -20.3(a 1.1 point decrease compared to the previous quarter), showing a decrease for two consecutive quarters.
  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 1.9 points to -20.6, which shows that labor shortages have grown for six consecutive quarters.
    Looking at the DIs by industry, labor shortages have grown in all industries, such as the manufacturing sector with a DI of -21.3(a 4.0 point decrease compared to the previous quarter), the construction industry with that of -33.4(a 3.2 point decrease from the previous quarter), and the wholesale industry with that of -15.3(a 2.6 point decrease from the previous quarter).

(Reference)An example comment from surveyed companies

  • Although we are facing a severe situation in securing employees, many employees continue leaving us. This situation is forcing us to decline many new orders from our existing customers. The severe labor shortage is seriously troubling us.(Company in the business services industry in Mie Prefecture)
Note:
DIs are calculated on a seasonally-adjusted quarter-on-quarter basis unless otherwise specified.

Release date

December 13, 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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