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The 132nd Business Conditions (April-June 2013)

Survey Procedures

Date of the survey: June 1, 2013

The 132nd Survey of SME Business Conditions

(April-June 2013)
Research Agency: Organization for Small and Medium Enterprises and Regional Innovation

Key survey results

The recent business conditions of small and medium-sized enterprises appear to be continuously picking up.

  • The business conditions DI (diffusion index) of all industries showed a decrease in the negative gap for the third consecutive quarter.
  • As for the business conditions DI of each industry, the negative gap of both the manufacturing and non-manufacturing sectors decreased.
  1. From April to June 2013, the business conditions DI (diffusion index) of all industries improved by 3.2 percentage points from minus 20.9 in the preceding quarter to minus 17.7, which means that the negative gap decreased for three successive quarters.
  2. The business conditions DI of the manufacturing sector improved by 2.8 percentage points from minus 19.8 in the preceding quarter to minus 17.0, which means that the negative gap decreased. Regarding the business conditions DI of each industry, the negative gap decreased in 12 industries (including the manufacture of pulp, paper and paper products, transportation equipment, machinery and equipment, and chemical and allied products, and miscellaneous manufacturing industries). The negative gap deteriorated in 2 industries (printing and the manufacture of textile mill products).
  3. The business conditions DI of the non-manufacturing sector improved by 4.0 percentage points from minus 21.9 in the preceding quarter to minus 17.9, which means that the negative gap decreased. Looking at the business conditions DI of each industry, the negative gap decreased in all of the industries, namely the construction, retail, wholesale and service sectors.
  4. The financing DI of all industries improved by 2.3 percentage points from minus 18.0 in the preceding quarter to minus 15.7, the DI measuring long-term financing difficulty improved by 1.4 percentage points from minus 9.7 in the preceding quarter to minus 8.3, and the DI of short-term financing difficulty improved by 0.8 percentage points from minus 6.3 in the previous quarter to minus 5.5, which means that the negative gap decreased.

Topic

In this quarter, the negative gap of the unit sales price/per-customer sales DI (on a year-on-year basis) improved by 6.2 percentage points from minus 23.1 in the preceding quarter to minus 16.9, and that of ordinary profit DI (on a year-on-year basis) also improved by 7.1 percentage points from minus 33.3 in the preceding quarter to minus 26.2. On the other hand, the materials/goods purchase unit prices DI ("rising" minus "falling", on a year-on-year basis) improved by 9.7 percentage points from 20.3 in the preceding quarter to 30.0 for the second consecutive quarter. Rises in the materials/goods purchase unit prices due to the depreciation of the yen should be closely monitored.

Note: The DI is calculated on a seasonally-adjusted quarter-on-quarter basis unless otherwise specified.

Survey Procedures

(1) Date of the survey:
As of June 1, 2013
(2) Survey method:
Feedback given to management consultants belonging to the Commerce and Industry Association and Chamber of Commerce and Industry throughout the country, and to survey personnel of the Federation of Small Business Associations
(3) Companies surveyed:
The nationwide complement of small and medium-sized enterprises as defined in the Small and Medium-sized Enterprise Basic Act
  Number of companies surveyed (%) Number of valid response companies (%) Response rate (%)
Manufacturing 4,647 (24.5) 4,519 (24.6) (97.2)
Construction 2,427 (12.8) 2,349 (12.8) (96.8)
Wholesale trade 1,201 (6.3) 1,148 (6.2) (95.6)
Retail trade 4,702 (24.8) 4,537 (24.7) (96.5)
Services 5,995 (31.6) 5,817 (31.7)

(97)

Total 18,972 (100) 18,370 (100) (96.8)
(4) Others
・For every quarter from April to June, the data in previous years is replaced with seasonally-adjusted data.
・The most recent long-term time series data is displayed on the website of the Small and Medium Enterprise Agency as well as that of the Organization for Small and Medium Enterprises and Regional Innovation

1. Business conditions DI

(1) All industries

From April to June 2013, the business conditions DI (diffusion index) of all industries improved by 3.2 percentage points from minus 20.9 in the preceding quarter to minus 17.7, which means that the negative gap decreased for three successive quarters. The business conditions DI of the manufacturing sector improved by 2.8 percentage points from minus 19.8 in the preceding quarter to minus 17.0, which means that the negative gap decreased. The business conditions DI of the non-manufacturing sector improved by 4.0 percentage points from minus 21.9 in the preceding quarter to minus 17.9, which means that the negative gap decreased.

Changes in the business conditions DI of small and medium-sized enterprises

Changes in the business conditions DI of small and medium-sized enterprises

(2) Manufacturing industry

The business conditions DI of the manufacturing sector improved by 2.8 percentage points from minus 19.8 in the preceding quarter to minus 17.0, which means that the negative gap decreased. Of the breakdown of 14 industries in manufacturing, 12 industries decreased their minus gap from the preceding quarter, as seen in an improvement by 21.4 percent points to 4.7 in the pulp, paper and paper products industry, an improvement by 10.0 percent points to minus 9.7 in the manufacture of transportation equipment, an improvement by 9.7 percent points to minus 17.3 in the manufacture of machinery and equipment, an improvement by 7.9 percent points to minus 14.7 in the miscellaneous manufacturing industries, and an improvement by 6.5 percent points to minus 9.1 in the chemical and allied products. The negative gap deteriorated in 2 industries, as seen in the worsening by 3.9 percent points to minus 30.4 in printing and the worsening by 2.7 percent points to minus 22.6 in the manufacture of textile mill products.

Changes in the business conditions DI of small and medium-sized enterprises by industry (1)
(From April-June, 2010 to April-June, 2013)

Changes in the business conditions DI of small and medium-sized enterprises by industry (1)

Changes in the business conditions DI of small and medium-sized enterprises by industry (2)
(From April-June, 2010 to April-June, 2013)

Changes in the business conditions DI of small and medium-sized enterprises by industry (2)

(3) Non-manufacturing industries

The business conditions DI of the non-manufacturing sector improved by 4.0 percentage points from minus 21.9 in the preceding quarter to minus 17.9, which means that the negative gap decreased.

Looking at the business conditions DI of each industry, the negative gap decreased in all of the industries from the preceding quarter, as seen in an improvement by 6.4 percent points to minus 4.5 in the construction industry, an improvement by 5.2 percent points to minus 26.6 in retail trade, an improvement by 4.0 percent points to minus 17.4 in the wholesale trade, and an improvement by 1.9 percent points to minus 16.8 in the services.

Changes in the business conditions DI of small and medium-sized enterprises
by industry or trade
(From April-June, 2010 to April-June, 2013)

Changes in the business conditions DI of small and medium-sized enterprises by industry or trade

Of the breakdown of the service sectors, the business conditions DI of accommodations improved by 9.1 percent points from the preceding quarter to minus 9.3, that of services to business establishments including transportation and warehousing improved by 9.1 percent points from the preceding quarter to minus 18.3, and that of personal services including automobile maintenance services and others improved by 4.5 percent points from the preceding quarter to minus 13.3, and that of services to business establishments including professional and technical services improved by 2.5 percent points from the previous quarter to minus 7.4.

As for the business conditions DI of information and communications and advertising, the negative gap increased by 1.4 percent points from the previous quarter to minus 6.3.

Changes in the business conditions DI of small and medium-sized enterprises engaged
in services industries by industry
(From April-June, 2010 to April-June, 2013)

Changes in the business conditions DI of small and medium-sized enterprises engaged in services industries by industry

Changes in the business conditions DI of small and medium-sized enterprises by size of trade
[For reference]

Changes in the business conditions DI of small and medium-sized enterprises by size of trade

Topics

In this quarter, the negative gap of the unit sales price/per-customer sales DI (on a year-on-year basis) improved by 6.2 percentage points from minus 23.1 in the preceding quarter to minus 16.9, and that of ordinary profit DI (on a year-on-year basis) also improved by 7.1 percentage points from minus 33.3 in the preceding quarter to minus 26.2. On the other hand, the materials/goods purchase unit prices DI ("rising" minus "falling", on a year-on-year basis) improved by 9.7 percentage points from 20.3 in the preceding quarter to 30.0 for the second consecutive quarter. Rises in the materials/goods purchase unit prices due to the depreciation of the yen should be closely monitored.

The materials/goods purchase unit prices DI, the unit sales price/per-customer sales DI and the ordinary profit DI (on a year-on-year basis)

The materials/goods purchase unit prices DI, the unit sales price/per-customer sales DI and the ordinary profit DI (on a year-on-year basis)

Comments of the companies surveyed

  • With the increased demand for housing, demand for house timber turned upwards. The short-term assignment is how to secure profits under such favorable circumstances. (Timber and wood products, Kagoshima)
  • Business has turned better. Under such movements, demand for shorter delivery times is increasing and jobs are apt to concentrate on specific terms. Problems of the shortage of production facilities and their aging are clearly surfacing. (Ceramic, stone and clay products, Tochigi)
  • Business conditions are turning better, assisted by the rapidly devaluating Japanese yen. However, materials prices are rising. How to pass the increased materials prices smoothly onto the selling prices of the products is the assignment, since materials costs are rising. (Metal products, Shizuoka)
  • Received orders are gradually increasing, assisted by expanding received orders by customers related to the manufacturing of export products (automobiles) due to the weakened yen. There are expectations for the effects of Abenomics, but they are not clear in local districts. (Machinery and equipment, Toyama)
  • Received orders for automobile parts are clearly increasing, due to the improving US economy. Orders have been expanding rapidly since May this year. The issue of capital investment in manufacturing facilities for new order items is my headache. (Transportation equipment, Niigata )
  • Finally the recruitment of the necessary engineers to match the increase in the jobs is settled and progress in these jobs is getting better. New construction of houses is beginning to increase, since a rise in the consumption tax is expected. (Construction, Fukushima)
  • Demand for home electronics including TVs is not good, but businesses related to EcoCute heat pump water heating systems and house renovations are growing. This trend may continue in the future. (Retail trade, Yamagata)
  • I am unable to shift the increased materials costs onto selling prices due to the weakened yen. The average sale per customer is declining. Sales of food and beverage are increasing, but sales of takeout food and souvenirs are declining. (Retail trade, Miyagi )
  • The number of non-Japanese users is increasing significantly, especially the number of travelers from North European countries is increasing, in addition to those from Taiwan and Thailand. (Accommodations, Gifu)
  • Sales are slightly increasing. The employees are taking root here and customers have been secured. Business is good. (Personal services, Shizuoka)
  1. Business conditions DI
    (1) All industry
    (2) Manufacturing
    (3) Non-manufacturing
    Topics
    Time series chart of the main DI
  2. - (1) Sales DI
    - (2) Unit sales prices/per-customer sales DI
  3. Materials/goods purchase unit prices DI
  4. Inventory level DI
  5. Profits (ordinary profit) DI
  6. Financing DI
  7. Difficulty level in financing DI
  8. Number of employees DI
  9. Excess or shortage of employees DI
  10. Trend of capital investment
  11. Production facilities' excess or deficiency DI
  12. Problems of management

Companies surveyed

  Number of companies surveyed Ratio (%)
Manufacturing 4,647 24.5
Construction 2,427 12.8
Wholesale trade 1,201 6.3
Retail trade 4,702 24.8
Services 5,995 31.6
Total 18,972 100