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The 157th Survey of SME Business Conditions (July-September 2019) Released

September 30, 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 July-September 2019 period and the forecasts (DIs) for the October-December 2019 period concerning SME business conditions, sales amounts, ordinary profits, and other data.

Key point of the survey results

Much of the recent improvement in SMEs business conditions has paused, however, improvement is still seen in some industries.

For details, see the Appendix. The following are excerpts from it.

(1) From July to September 2019, the business conditions DI for all industries was -16.6 (down by 1.1 points from the previous quarter), showing a decrease for three consecutive quarters.

(2) The business conditions DI for the manufacturing sector was -17.2 (down by 2.2 points form the previous quarter), showing a decrease for five consecutive quarters. Looking at the business conditions DI of each industry, improvements were seen in five industries, including the furniture and accessories, pulp, paper and paper products, miscellaneous manufacturing, metal products and printing industries, while the DIs for nine industries decreased, including the chemical, transportation equipment, iron and steel and non-ferrous metal and textile industries.

(3) The business conditions DI for the non-manufacturing sector was -16.4 (down by 0.8 points from 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, retail trade and service industries.

(4) The financing DI of all industries was -12.7 (down by 0.9 points from the previous quarter), showing a decrease for two consecutive quarters. Looking at the financing DI for each industry, the manufacturing sector showed a decrease of -11.9 (down by 2.0 points from the previous quarter), while the non-manufacturing sector showed a decrease of -13.1 (down by 0.7 points from the previous quarter). The DI measuring long-term financing difficulty was -2.7 (up by 0.3 points from the previous quarter), showing an increase for the first time in three quarters, and the DI measuring short-term financing difficulty was -0.8 (down by 0.2 points from the previous quarter), showing a decrease for the first time in two quarters.

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