June 27, 2019
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 commercial and industrial associations and chambers of commerce and industry, 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 2019 period and the forecasts (DIs) for the July-September 2019 period concerning SME business conditions, sales amounts, ordinary profits, and other data.
Key point of the survey results
The recent business conditions of small and medium enterprises basically tend to show moderate improvement, while progress in some industries appears to have paused.
Some surveyed companies made a comment on the decline of the earning rate due to an increase in production costs. The materials/goods purchase unit prices DI on a year-on-year basis in this quarter was 39. (up by 3.4 points from the previous quarter), and this shows the largest positive increase in recent years.
For details, see the Appendix. The following are excerpts from it.
- From April to June 2019, the business conditions DI for all industries was -15.5 (down by 0.6 points from the previous quarter), showing a decrease for two consecutive quarters.
- The business conditions DI for the manufacturing sector was -15.0 (down by 0.5 points from the previous quarter), showing a decrease for four consecutive quarters. Looking at the business conditions DI of each industry, improvements were seen in seven industries, including the chemical, printing, ceramic, stone, and clay products, and food industries, while the DIs for seven industries decreased, including the pulp, paper and paper products, machinery equipment, wood and wooden products and metal products industries.
- The business conditions DI for the non-manufacturing sector was -15.6 (down by 0.6 points from the previous quarter), showing a decrease for the first time in three quarters. Looking at the business conditions DI of each industry, it improved in the construction and wholesale industries, while it decreased in the service and retail trade industries.
- The financing DI of all industries was -11.8 (down by 0.7 points from the previous quarter), showing a decrease for the first time in three quarters. Looking at the financing DI of each industry, the manufacturing sector showed an improvement at -9.9 (up by 0.3 points from the previous quarter), while the non-manufacturing sector showed a decrease at -12.4 (down by 1.1 points from the previous quarter). The DI measuring long-term financing difficulty remained the same at -3.0 (i.e., 0.0 points from the previous quarter), while the DI measuring short-term financing difficulty showed an increase at -0.6 (up by 0.3 points from the previous quarter), an increase for the first time in two quarters.
Division in Charge
Research Office, Policy Planning Division, Business Environment Department, Small and Medium Enterprise Agency