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Preliminary Report of 2021 Basic Survey of Japanese Business Structure and Activities

January 28, 2022

The Ministry of Economy, Trade and Industry (METI) has been conducting a survey titled the "METI Basic Survey of Japanese Business Structure and Activities" with the aim of clarifying how the management strategies of Japanese enterprises and industrial structures actually evolve, and obtaining basic data to support administrative measures. The following is a summarized preliminary report of the 2021 survey based on actual results from FY2020.
Key points revealed from 27,921 total enterprises categorized in target sectors for the survey are as follows:

  • Sales per company decreased by 5.8% on a year-on-year basis, a decrease for two consecutive years.
  • Ordinary profit per company decreased by 1.0% on a year-on-year basis, a decrease for three consecutive years.
  • The ratio of ordinary profit to sales per company increased by 0.2 percentage points (%pt) on a year-on-year basis, the first increase in three years.
  • Value added decreased for two consecutive years due to a decrease in operating profits and other factors.
  • Labor share ratio increased due to a significant decrease in gross value added while the total payroll decreased.
  • Labor productivity decreased due to a value added decrease while the number of regular employees increased slightly.

Summary of the results

(1) Sales and profit conditions (see overview figures and tables 1-3 and 2-2)

1. Sales per company in FY2020 were 23.22 billion yen, down by 5.8% on a year-on-year basis, showing a decrease for two consecutive years.
Looking at the major sectors on a year-on-year basis, sales were 20.49 billion yen in the manufacturing sector, down by 5.7%, 37.12 billion yen in the wholesale sector, down by 7.9%, and 25.28 billion yen in the retail sector, down by 2.6%.

2. Ordinary profit per company was 1.16 billion yen, showing a decrease of 1.0% on a year-on-year basis for three consecutive years.
Looking at the major sectors on a year-on-year basis, profit was 1.34 billion yen in the manufacturing sector, up by 1.9%, 1.27 billion yen in the wholesale sector, down by 0.1%, and 780 million yen in the retail sector, up by 5.9%.

3. The ratio of ordinary profit to sales per company was 5.0%, up by 0.2%pt on a year-on-year basis. This is the first increase in three years.
Looking at the major sectors on year-on-year basis, the ratio was 6.5% in the manufacturing sector, up by 0.5%pt, 3.4% in the wholesale sector, up by 0.2%pt, and 3.1% in the retail sector, up by 0.3%pt.

(2) Conditions regarding gross value added, the labor share ratio and the labor productivity (see overview figures and tables 4-1, 5-1 and 5-2)

1. Value added was 122.0144 trillion yen, down by 1.4% on a year-on-year basis, due to a decrease in the operating profits and other factors.
Looking at the major sectors on a year-on-year basis, value added was 56.9872 trillion yen in the manufacturing sector, down by 1.9%, 16.1394 trillion yen in the wholesale sector, down by 1.6%, and 16.8977 trillion yen in the retail sector, up by 0.9%.

Note: Value added = operating profits + total payroll + depreciation costs + welfare expenses + rental fees of movables and real property + taxes and duties

2. The labor share ratio was 50.7%, up by 0.6%pt on a year-on-year basis, owing to a decrease in value added exceeding a decrease in the total payroll.
Looking at the major sectors on year-on-year basis, the ratio was 51.0% in the manufacturing sector, up by 0.2%pt, 49.7% in the wholesale sector, up by 0.2%pt, and 49.4% in the retail sector, down by 0.6%pt.

Note: The term "labor share ratio" refers to an indicator showing the ratio of personnel expenses to value added, which explains how much of the value that a company has newly created has been allocated to the personnel expenses. The ratios herein were the results derived from the following formula:
Labor share ratio = total payroll ÷ value added x 100

3. The labor productivity was 8.484 million yen, down by 1.6% on a year-on-year basis, due to a decrease in the value added and a slight increase in the number of regular employees.
Looking at the major sectors on a year-on-year basis, labor productivity was 10.759 million yen in the manufacturing sector, down by 2.3%, 10.602 million yen in the wholesale sector, down by 0.9%, and 4.944 million yen in the retail sector, down by 0.4%. All of them showed a decrease.

Note: The term "labor productivity" refers to an indicator used in productivity analysis, representing the value added per employee. The productivities herein were the results derived from the following formula:
Labor productivity = value added ÷ the number of regular employees

Division in Charge

Enterprise Statistics Office, Research and Statistics Department, Minister's Secretariat