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The 158th Survey of SME Business Conditions (October-December 2019) Released

December 12, 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 October-December 2019 period and the forecasts (DIs) for the January-March 2020 period concerning SME business conditions, sales amounts, ordinary profits, and other data.

Key point of the survey results

The business conditions DI for SMEs decreased for four consecutive quarters, but is forecast to show signs of improvement.

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

  1. From October to December 2019, the business conditions DI for all industries was -21.1 (down by 4.5 points from the previous quarter), showing a decrease for four consecutive quarters.
  2. The business conditions DI for the manufacturing sector was -22.4 (down by 5.2 points from the previous quarter), showing a decrease for six consecutive quarters. Looking at the business conditions DI for each industry, improvements were seen in three industries, including the ceramic, stone, and clay products, wood and wooden products and chemical industries, while the DIs for 11 industries decreased, including the furniture and accessories, transportation equipment and metal products industries.
  3. The business conditions DI for the non-manufacturing sector was -20.6 (down by 4.2 points from the previous quarter), having decreased for three consecutive quarters. Looking at the business conditions DI for each industry, the DIs decreased in all industries of retail trade, wholesale, construction and services.
  4. The financing DI of all industries was -14.0 (down by 1.3 points from the previous quarter), having decreased for three consecutive quarters. Looking at the financing DI for each industry, the manufacturing sector showed a decrease of -14.3 (down by 2.4 points from the previous quarter), while the non-manufacturing sector showed a decrease of -13.9 (down by 0.8 points from the previous quarter). The DI measuring long-term financing difficulty was -2.8 (down by 0.1 points from the previous quarter), showing a decrease for the first time in three quarters, and the DI measuring short-term financing difficulty was -1.0 (down by 0.2 points from the previous quarter), having decreased for two consecutive quarters.

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Research Office, Policy Planning Division, Business Environment Department, Small and Medium Enterprise Agency

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