Cabinet Office

Press Release
February 28, 2017
Economic and Social Research Institute

FY2016 Annual Survey of Corporate Behavior (Summary)<II. Medium-sized and SMEs>
Coverage

Medium-sized and SMEs with a capital of 0.1 to 1 billion yen (not incl.) among private enterprises allover Japan (excl. enterprises covered in I. Listed Companies)
7,839 enterprises (randomly selected from the establishment frame database)Responding companies 3,313 (1,491 in manufacturing industries, 1,822 in non-manufacturing industries)
Response rate

42.3%

Survey items

Forecast of Japan’s economic growth rate, forecast of growth rate of industry demand, forecast yen
dollar rate, break-even yen-dollar rate, growth rate of capital investment,change in the number of
employees, overseas production ratio, etc.
(Note) Consolidated basis except for the number of employees

Period of the survey

1.

January 2017 (Questionnaire deadline: January 16 )Note) T he survey of Medium-sized and SMEs started in FY2016.

Japan’s economic growth rate

■ The real economic growth rate forecast for the “next fiscal year” (FY2017) was 1.0%, and the rate
was positive.

■ The nominal economic growth rate forecast (1.7%) was higher than the real rate forecast (1.0%),
suggesting that future price increase has been taken into consideration.

(Reference: FY2016 Annual Survey, I. Listed Companies (the same shall apply hereafter))
The real and the nominal economic growth rate forecasts for the “next fiscal year” were 1.0% and 1.6%
respectively.

2.

Growth rate of industry demand■ The forecast of the real growth rate of industry demand of Medium-sized and SMEs for the “next fiscalyear” (FY2017) was 0.8%. The figures for the manufacturing and non-manufacturing industries were 0.7%
and 0.9%, respectively.

■ The medium-term forecasts for the “next 3 years” and the “next 5 years” were 0.9% and 0.8%, respectively.
■ In terms of the forecasts for the “next fiscal year” by sector, the growth rate forecast of the manufacturingindustries was high in “Pharmaceutical” (1.6%) and “Electric Appliances” (1.3%), and that of the nonmanufacturing industries was high in “Insurance” and “Securities & Commodity Futures” (1.4% for both).

(Reference: I. Listed Companies)
The real growth rate forecast for the “next fiscal year was 0.9% (0.9% for the manufacturing industries,
and 0.8% for the non-manufacturing industries), and the forecasts of real growth rate for the “next 3
years” and the “next 5 years” were 1.0% and 0.9%, respectively.

Inquiries:

Department of Business Statistics, Economic and Social Research Institutehttp://www.esri.cao.go.jp/en/stat/ank/ank-e.html

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(%)

[Fig. 2-2-1] Real growth rate forecasts of industry demand by sector (next fiscal year)

3.0

2.0

1.0

All industries

-1.0

3.

Pharmaceutical
Insurance
Securities & Commodity Futures
Information & Communication
Electric Appliances
Air Transportation
Chemicals
Real Estate
Construction
Other Financing Businesses
Machinery
Services
Nonferrous Metals
Electric Power & Gas
Transportation Equipment
Warehousing & Harbor Transportation Services
Textiles & Apparels
Precision Instruments
Rubber Products
Wholesale Trade
Foods
Fishery, Agriculture & Forestry
Land Transportation
Oil & Coal Products
Glass & Ceramics Products
Retail Trade
Iron & SteelMarine Transportation
Pulp & Paper
Metal Products
MiningOther Products

0.0

Exchange rates(1) Forecast yen-dollar rate
■ The forecast yen-dollar rate after 1 year (around January 2018) for Medium-sized and SMEs (allindustries, class value average) was 113.1 yen/dollar.

■ Compared with the yen-dollar rate for the month immediately before the survey (116.0 yen/dollar in
December 2016), the forecast appreciated by 2.9 yen.

(Reference: I. Listed Companies)
The forecast yen-dollar rate after 1 year was 113.1 yen/dollar. Compared with the yen-dollar rate forthe month immediately before the survey (116.0 yen/dollar), the forecast appreciated by 2.9 yen.

(2) Break-even yen-dollar rate
■ The break-even yen-dollar rate of exporting Medium-sized and SMEs (all industries, actual value
average) was 105.6 yen/dollar.
■ In terms of the break-even yen-dollar rate by industry, the rates of the manufacturing and the nonmanufacturing industries were 104.8 yen/dollar and 109.2 yen/dollar, respectively. Compared withthe yen-dollar rate for the month immediately before the survey, the rates of the manufacturing andnon-manufacturing industries appreciated by 11.2 yen and 6.8 yen, respectively.

■ In terms of the break-even yen-dollar rate by sector, compared with the all industries average,
sectors such as “Land Transportation” (115.6 yen/dollar) and “Pulp & Paper” (113.6 yen/dollar) set
weaker break-even rates, while sectors such as “Pharmaceutical” (95.0 yen/dollar) and “Chemicals”(101.3 yen/dollar) set stronger rates.

(Reference: I. Listed Companies)
The break-even yen-dollar rate of exporting companies was 100.5 yen/dollar (99.9 yen/dollar for the
manufacturing industries, and 104.2 yen/dollar for the non-manufacturing industries). Compared withthe yen-dollar rate for the month immediately before the survey, the rates of the manufacturing andnon-manufacturing industries appreciated by 16.1 yen and 11.8 yen, respectively.

ii

[Fig. 2-3-1] Forecast yen-dollar rate after 1 year and the break-even yen-dollar rate by industry
Forecast yen-dollar rate after 1 year

(yen/dollar)

Break-even yen-dollar rate

130
120
110

113.1 112.7

112.9

105.6 104.8

112.3

113.5
109.2
105.2

112.9

104.5

104.8

100
90
Yen-dollar rate in the month immediately before
the survey (Dec.2016) : 116.0 yen/dollar

80

Non-manufacturing

Other

Processing-type

Manufacturing

All industries

60

Material-type

70[Fig. 2-3-2] Break-even yen-dollar rate by sector(yen/dollar)120

All industries average : 105.6yen/dollar

110
100

101.3 101.7

103.0
104.3
104.8
108.2 109.4 109.8 110.8 113.6
105.2
107.1
106.4
107.6
107.0
105.2
105.4
102.4
104.7
103.8

115.6

95.0

90
80
70

Weaker yen than averageStronger yen than average

Note 1) “ Forecast yen-dollar rate” refers to the class value average.
Note 2) Calculation of “ break-even yen-dollar rate” includes only enterprises that conduct exports.
Note 3) Sectors include only those with 5 or more responding enterprises..

iii

Land Transportation

Pulp & Paper

Warehousing & Harbor Transportation Services

Wholesale Trade

Glass & Ceramics Products

Foods

Other Products

Iron & SteelInformation & Communication

Marine Transportation

Machinery

Nonferrous Metals

Textiles & Apparels

Electric AppliancesServices

Rubber Products

Precision Instruments

Transportation Equipment

Metal Products

Construction

Chemicals

Pharmaceutical

60

4.

Prices■ Average purchase prices after 1 year for Medium-sized and SMEs (all industries, class value average)
increased by 3.0%.

■ Average sales prices after 1 year (all industries, class value average) increased by 1.4%.
■ Purchase price increases surpassed sales price increases, and terms of trade (all industries) were
forecast to worsen by 1.6 percentage points.

(Reference: I. Listed Companies)
Average purchase prices after 1 year increased by 2.3%, and average sales price after 1 year increased by
1.1%. Terms of trade were forecast to worsen by 1.2 percentage points.

[Table 2-4-1]Forecast rate of changes in average purchase and sales prices and the change inthe terms of trade after 1 year by industry
FY2016
Average purchase priceAll industries

terms of trade

3.0

1.4

-1.6

3.1

1.1

-2.1

M aterial-type

3.9

1.8

-2.0

Processing-type

2.4

0.4

-2.0

Other

3.1

1.0

-2.2

2.9

1.7

-1.2

M anufacturing

Industry

Average sales priceNon-manufacturing industries

Note 1) Terms of Trade = Rate of change in average sales price – rate of change in average purchase priceNote 2) Terms of trade are derived from the rate of change of the average sales price and the rate of change of the averagepurchase price（Refer to FY2016 Statistical Tables <II. Medium-sized and SMEs> 3-1 and 3-2）that include two decimal
points. Therefore, they may not always coincide with figures calculated from the rate of change in average sales prices andthe rate of change in average purchase price in the table above due to rounding.

5.

Change in capital investment■ The percentage of Medium-sized and SMEs that increased capital investment (all industries) for the“past 3 years” (average of FY2014–FY2016) was 62.8%.
■ The percentage of enterprises expecting to increase capital investment (all industries) over the “next3 years” (average of FY2017–FY2019) was 62.2%.

(Reference: I. Listed Companies)
73.6% for the “past 3 years” (average of FY2014–FY2016), and 68.9% for the “next 3 years” (average of
FY2017–FY2019).

iv

[Table 2-5-1]Change in the percentage of enterprises that increased/decreased capital investment or are
expecting an increase/decrease in capital investment for the past 3 years or over the next 3 years (all industries)
(%)
100%
90%

9.1

10.1

9.5

9.0

18.8

18.8

80%
70%
60%
50%
40%
30%
20%
10%

62.2

62.8

No capital investment was made./No capital investment is planned.
Decrease
No change
Increase0%
Next 3 years

Past 3 years
Survey year (FY) 2016

Note 1) Increase: Percentage of enterprises responding over 0%, No change: Percentage of enterprises responding 0%,
Decrease: Percentage of enterprises responding less than 0%.
Note 2) The “ past 3 years” means the period from FY2014 to FY2016.
Note 3) The “ next 3 years” means the period from FY2017 to FY2019.

v

6.

Change in the number of employees(1) Number of employees■ The percentage of Medium-sized and SMEs that increased employees (all industries) for the “past 3 years”(average of FY2014–FY2016) was 52.5%.

■ The percentage of enterprises expecting to increase employees (all industries) over the “next 3 years”(average of FY2017–FY2019) was 58.3%.

(Reference: I. Listed Companies)
64.9% for the “past 3 years” (average of FY2014–FY2016), and 67.8% for the “next 3 years” (average of
FY2017–FY2019).
[Table 2-6-1]Changes in the percentage of enterprises that increased/decreased employees or are expecting
an increase/decrease in employees for the past 3 years or over the next 3 years (all industries)
(%)
100%
90%

11.5
22.1

80%
30.3

70%
25.5
60%
50%
40%
30%

58.3

52.5

20%
Decrease10%

No change

Increase

0%
Past 3 years

Next 3 years
Survey year FY2016

Note 1) Increase: Percentage of enterprises responding over 0%, No change: Percentage of enterorises responding 0%,
Decrease: Percentage of enterprises responding less than 0%.
Note 2) The “ past 3 years” means the period from FY2014 to FY2016.
Note 3) The “ next 3 years” means the period from FY2017 to FY2019.

(2) Number of full-time employees■ The percentage of Medium-sized and SMEs that increased full-time employees (all industries)
among their employees for the “past 3 years” (average of FY2014–FY2016) was 52.4%.
■ The percentage of Medium-sized and SMEs expecting to increase full-time employees (all industries)
among their employees over the “next 3 years” (average of FY2017–FY2019) was 58.4%.

(Reference: I. Listed Companies)
63.2% for the “past 3 years” (average of FY2014–FY2016), and 65.9% for the “next 3 years” (averageof FY2017–FY2019).

vi

[Table 2-6-2]Change in the percentage of enterprises that increased/decreased full-time employees or are expecting an
increase/decrease in full-time employees among their employees for the past 3 years or over the next 3 years (all industries)
(%)
100%

11.8

90%

21.7

80%
29.9

70%
25.8
60%
50%
40%
30%

58.4

52.4

20%
Decrease10%

No change

Increase

0%
Past 3 years

Next 3 years
Survey y ear FY2016

Note 1) Increase: Percentage of enterprises responding over 0%, No change: Percentage of enterprises responding 0%,
Decrease: Percentage of enterprises responding less than 0%.
Note 2) The “ past 3 years” means the period from FY2014 to FY2016.
Note 3) The “ next 3 years” means the period from FY2017 to FY2019.
Note 4) The item name “ regular employees” was changed to “ full-time employees” in FY2016.

7.

Overseas production ratio (manufacturing industries)■ The “FY2015 actual figures” for the percentage of Medium-sized and SMEs conducting overseas
production was 13.4%. The “FY2016 estimate” was 13.6% and the “FY2021 forecast” was 14.5%.

■ The “FY2015 actual figures” for the overseas production ratio of Medium-sized and SMEs was 4.0%.
The “FY2016 estimate” was 4.0% and the “FY2021 forecast” was 4.4%.

■ 9.3% of Medium-sized and SMEs expected an increase in overseas production ratio in the “FY2021
forecast” compared to the “FY2016 estimate,” 88.2% expected no change, and 2.5% expected adecrease.

(Reference: I. Listed Companies)
The percentages of companies conducting overseas production: 65.1% for the FY2015 actual figures,
64.7% for FY2016 estimate, and 64.6% for FY2021 forecast.
The overseas production ratio: 21.9% for the FY2015 actual figures, 21.4% for FY2016 estimate, and23.5% for FY2021 forecast.

(%)[Fig. 2-7-1] Ratio of companies that conduct overseas
production (manufacturing industries)

25.0

8.0

20.0
15.0

(%)

[Fig. 2-7-2] Transition of overseas production ratios(manufacturing industries)

6.0
13.4

14.5

13.6

4.0

4.0

4.4

4.0

10.0

2.0
5.0
Manufacturing
Processing-type

Manufacturing
Processing-type

Material-type
Other

Material-type
Other

0.0

0.0
2015

2016

2017

2018

2019

2020

2015

2021

2016

2017

2018

2019

2020

2021

Note 1) Overseas production ratio = Volume of overseas production / (Volume of domestic production + Volume of overseas production)
Note 2) Figure 2-7-1 and Figure 2-7-2 show the FY2016 estimate and FY2021 forecast. For other years, actual result of the previous year innext year’s survey are shown. (For example, the value for FY2015 is the value for “ FY2015 actual result” in the FY2016 survey.)

Note 3) Overseas production ratio of Figure 2-7-2 is a simple average including enterprises that responded 0.0%

vii

8.

Reverse imports ratio (manufacturing industries)■ The “FY2015 actual figures” for the reverse imports ratio of Medium-sized and SMEs was 27.2%.
■ The “FY2016 estimate” was 25.9%, and the “FY2021 forecast” was 24.3%.

(Reference: I. Listed Companies)
19.5% for the FY2015 actual result, 19.5% for FY2016 estimate, and 19.4% for FY2021 forecast.

(%)[Fig. 2-8-1] Transition of the ratio of reverse

40.0
35.0
30.0

27.2

25.9

24.3

25.0
20.0
15.0
10.0
5.0

Manufacturing
Processing-type

Material-type
Other

0.0
2015

2016

2017

2018

2019

2020

2021

(FY)

Note 1) Reverse imports ratio = Export volume to Japan / Volume of overseas local production
Note 2) FY2016 represents the estimate of the actual , FY2021 represents the forecast, and other years represent the actual result forthe previous fiscal year in the survey for the following fiscal year. (For example, the value for FY2015 is the value for“ FY2015 actual result” in the FY2016 survey.)
Note 3) This is a simple average which excludes companies reporting 0.0% overseas production ratio, while it includes enterprises
answering 0.0% reverse imports ratio.

viii

9.

Reason for having an overseas production base (manufacturing industries)■ After combining the “main reason” for having an overseas production base with “other relevant
reasons” for Medium-sized and SMEs, the top reason was “Labor costs are low” (61.0%), and thesecond top reason was “Strong demand exists, or demand is forecast to expand, for our products inthe local market(s) and markets in neighboring countries” (49.1%).

(Reference: I. Listed Companies)“Strong demand exists, or demand is forecast to expand for our products in the local market(s) andmarkets in neighboring countries” for the top reason (70.7%), and “We can cater effectively tooverseas users’ needs” for the second top reason (47.0%)[Table 2-9-1] Composition ratio of the reason for having an overseas production base(Main reason + Other relevant reasons)
Manufacturing

Material-type

Processing-type

Other④ Strong demand exists, ordemand is forecast to expand,① Labor costs are low

61.0

for our products in the local

54.5① Labor costs are low

70.4① Labor costs are low

57.4

market(s) and markets inneighboring countries④ Strong demand exists, or④ Strong demand exists, ordemand is forecast to expand,demand is forecast to expand,for our products in the local

49.1① Labor costs are low

50.0

for our products in the local④ Strong demand exists, ordemand is forecast to expand,

43.9

for our products in the local

market(s) and markets inmarket(s) and markets inmarket(s) and markets inneighboring countries

neighboring countries

neighboring countries

51.9⑦ We have entered the⑤ We can cater effectively tooverseas users’ needs

35.8⑤ We can cater effectively tooverseas users’ needs

37.9⑤ We can cater effectively tooverseas users’ needs

overseas market(s) following

37.8

entry by our parent

37.0

enterprise or customer(s) andso on⑦ We have entered the⑦ We have entered theoverseas market(s) following
entry by our parent⑦ We have entered theoverseas market(s) following

34.4

entry by our parent

entry by our parent

enterprise or customer(s) andenterprise or customer(s) andenterprise or customer(s) and

so on

so on

so on

③ We can enjoy low costs of③ We can enjoy low costs of③ We can enjoy low costs ofmaterials, overall production

materials, overall production

processes, distributions, andland/buildings

27.1

processes, distributions, andland/buildings③ We can enjoy low costs ofoverseas market(s) following

31.8

25.8

materials, overall production
processes, distributions, and34.7

materials, overall production
processes, distributions, and31.5

land/buildings

25.5⑤ We can cater effectively tooverseas users’ needs

29.6

land/buildings

Note 1) The composition ratio of the “ Main reason” and “ Other relevant reasons” is based on the number of enterprises that responded.
Note 2) Responding enterprises can choose one “ Main reason,” and up to two “ Other relevant reasons.”ix