Cabinet Office

Press Release
March 2, 2018
Economic and Social Research Institute

FY2017 Annual Survey of Corporate Behavior (Summary)<II. Medium-sized and SMEs>
Coverage

Responding companies

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)
7,649 enterprises (randomly selected from the establishment frame database)
3,122 (1,400 in manufacturing industries, 1,722 in non-manufacturing industries)

Response rate

40.8%

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, prices , growth rate of capital investment, change in the numberof employees, overseas production ratio, etc.
(Note) Consolidated basis except for the number of employees

Period of the survey

January 2018 (Questionnaire deadline: January 15 )Note) The survey of Medium-sized and SMEs started in FY2016.

1. Japan’s economic growth rate
■ The real economic growth rate forecast for the “next fiscal year” (FY2018) was 1.1%, higher thanthe previous year’s survey result (1.0%).

■ The nominal economic growth rate forecast (1.5%) was higher than the real rate forecast (1.1%),
suggesting that future price increase has been taken into consideration.

(Reference: FY2017 Annual Survey, I. Listed Companies [the same shall apply hereinafter])
The real and nominal economic growth rate forecasts for the “next fiscal year” were 1.2% and 1.7%
respectively.

2. Growth rate of industry demand■ The forecast of the real growth rate of industry demand of Medium-sized and SMEs for the “nextfiscal year” (FY2018) was 0.9%, forecasting positive growth. The figures for both the
manufacturing industries and non-manufacturing industries were 0.9%.
■ 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
manufacturing industries was high in “Pharmaceutical” (1.9%) and “Electric Appliances” (1.5%),
and that of the non-manufacturing industries was high in “Insurance” (1.7%) and “Other
Financing Businesses” (1.3%).
(Reference: I. Listed Companies)
The real growth rate forecast for the “next fiscal year” was 1.3% (1.3% both for manufacturingindustries and non-manufacturing industries), and the forecasts for the real growth rate for the “next 3
years” and the “next 5 years” were 1.3% and 1.1% respectively.

<Contact Information>
Department of Business Statistics, Economic and Social Research Institute, Cabinet Office(Survey page: http://www.esri.cao.go.jp/jp/stat/ank/menu_ank.html)i[Fig. 2-2-1] Real growth rate forecasts of industry demand by industry
compared to the previous year’s results (next fiscal year)(%)

FY2016 survey
FY2017 survey

3.0

2.0
1.1
0.8

0.9 0.9

Non-manufacturing

0.4

Other

Processing-type

Material-type

Manufacturing

0.0

1.0
0.8 0.90.7 0.9 0.8 0.9

All industries

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

(%)

3.0

2.0

1.0

3.

Pharmaceutical
Insurance
Electric Appliances
Other Financing Businesses
Construction
Securities & Commodity Futures
Real Estate
Metal Products
MachineryIron & SteelInformation & Communication
Rubber Products
Glass & Ceramics Products
Chemicals
Marine Transportation
Textiles & Apparels
Warehousing & Harbor Transportation Services
Electric Power & Gas
Precision Instruments
Transportation Equipment
Nonferrous Metals
Services
Oil & Coal Products
Pulp & Paper
Wholesale Trade
Foods
MiningLand Transportation
Fishery, Agriculture & Forestry
Retail Trade
Air Transportation
Other Products-1.0

All industries

0.0

Exchange rates(1) Forecast yen-dollar rate

■ The forecast yen-dollar rate after 1 year (around January 2019) for Medium-sized and SMEs (allindustries, class value average) was 113.9 yen/dollar. This was a 0.8 yen depreciation compared withthe previous year’s survey result (113.1 yen/dollar).

■ Compared with the yen-dollar rate for the month immediately before the survey (113.0 yen/dollar in
December 2017), the forecast depreciated by 0.9 yen.

(Reference: I. Listed Companies)
The forecast yen-dollar rate after 1 year was 114.3 yen/dollar. Compared with the yen-dollar rate
for the month immediately before the survey (113.0 yen/dollar), the forecast depreciated by 1.3
yen.
ii

(2) Break-even yen-dollar rate
■ The break-even yen-dollar rate of exporting Medium-sized and SMEs (all industries, actual value
average) was 106.4 yen/dollar. This was a 0.8 yen depreciation compared with the previous year’s
survey result (105.6 yen/dollar).
■ In terms of the break-even yen-dollar rate by industry, the rates of the manufacturing industries andthe non-manufacturing industries were 106.0 yen/dollar and 108.2 yen/dollar, respectively. Comparedwith the yen-dollar rate for the month immediately before the survey, the rate for both the
manufacturing industries and non-manufacturing industries appreciated by 7.0 yen and 4.8 yen,respectively.
■ In terms of the break-even yen-dollar rate by sector, compared with the all industries average, sectors
such as “Foods” (111.9 yen/dollar) and “Warehousing & Harbor Transportation Services” (109.7
yen/dollar) set weaker break-even rates, while sectors such as “Pharmaceutical” (96.3 yen/dollar) and“Information & Communication” (101.0 yen/dollar) set stronger rates.

(Reference: I. Listed Companies)
The break-even yen-dollar rate of exporting companies was 100.6 yen/dollar (99.9 yen/dollar for
manufacturing industries, and 105.2 yen/dollar for non-manufacturing industries). Compared withthe yen-dollar rate for the month immediately before the survey, the rates of manufacturingindustries and non-manufacturing industries appreciated by 13.1 yen and 7.8 yen, respectively.
[Fig. 2-3-1] Forecast yen-dollar rate after 1 year and the break-even yen-dollar rate by industry( yen/dollar)

Forecast yen-dollar rate after 1 year
Break-even yen-dollar rate

130
120

113.9

110

114.0

113.7

106.4 106.0

113.8

113.4

105.8

104.8

114.0

107.1

108.2

100
90
Yen-dollar rate in the month immediately beforet he survey (Dec.2017) : 113.0 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
All industries average : 106.4y en/dollar

120

103.3

110
102.9

100

101.0

105.5

104.7

107.3

105.6

107.5

107.1

105.6

105.2

104.2

107.7 108.6 109.1

109.3

111.9
109.7

102.4

96.3

90
80

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

Foods

Warehousing & Harbor Transportation Services

Wholesale Trade

Textiles & Apparels

Rubber Products

Other Products

Precision Instruments

Glass & Ceramics Products

Machinery

Metal Products

Iron & SteelTransportation Equipment

Pulp & Paper

Construction

Electric Appliances

Chemicals

Marine Transportation

Nonferrous Metals

Information & Communication

60

Pharmaceutical

70

4.

Prices■ Average purchase prices after 1 year for Medium-sized and SMEs (all industries, class value average)
increased by 3.2% (while the previous year’s survey result was 3.0%).

■ Average sales prices after 1 year for Medium-sized and SMEs (all industries, class value average)
increased by 1.6% (while the previous year’s survey result was 1.4%).

■ Purchase price increases surpassed sales price increases for Medium-sized and SMEs, and terms of trade(all industries) were forecast to worsen by 1.6 percentage points.

(Reference: I. Listed Companies)
The average purchase price after 1 year increased by 2.5%, and the average sales price after 1 year
increased by 1.4%. The terms of trade were forecast to worsen by 1.1 percentage points.
[Table 2-4-1] Terms of trade by industry（％、％points）

Average purchase price
FY2017
surveyFY2016
surveyFY2017
surveyFY2016
surveyFY2017
surveyFY2016
survey

3.2

3.0

1.6

1.4

-1.6

-1.6

3.5

3.1

1.6

1.1

-2.0

-2.1

M aterial-type

3.9

3.9

2.2

1.8

-1.7

-2.0

Processing-type

2.8

2.4

0.8

0.4

-2.0

-2.0

Other

3.7

3.1

1.6

1.0

-2.2

-2.2

2.8

2.9

1.7

1.7

-1.1

-1.2

All industries
M anufacturing

Industry

Terms of trade

Average sales priceNon-manufacturing

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 FY2017 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 (all industries) that increased capital investment for the“past 3 years” (average of FY2015-FY2017) was 64.0%, which was higher than the previous year's
survey result (62.8%).

■ The percentage of Medium-sized and SMEs (all industries) expecting to increase capital investment
over the “next 3 years” (average of FY2018–FY2020) was 65.2%, which was higher than the previous
year’s survey result (62.2%).

(Reference: I. Listed Companies)
74.5% for the “past 3 years” (average of FY2015–FY2017), and 71.8% for the “next 3 years” (average of
FY2018–FY2020).

iv

[Fig. 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

8.5

9.5

8.0

18.8

19.6

10.1

9.4

9.0

7.6

80
70

17.8

18.8

60
50
40
64.0

62.8

30

65.2

62.2

No capital investment was made./No capital investment is planned.
Decrease
No change
Increase

20100FY2016FY2017FY2016

Past 3 years

FY2017
Next 3 years

Survey year

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 FY2015 to FY2017.
Note 3) The “next 3 years” means the period from FY2018 to FY2020.

6.

Change in the number of employees(1) Number of employees■ The percentage of Medium-sized and SMEs (all industries) that increased employees for the “past 3
years” (average of FY2015–FY2017) was 53.6%, which was higher than the previous year’s survey result(52.5%).
■ The percentage of Medium-sized and SMEs (all industries) expecting to increase employees over the“next 3 years” (average of FY2018–FY2020) was 59.4%, which was higher than the previous year’s
survey result (58.3%).

(Reference: I. Listed Companies)
67.4% for the “past 3 years” (average of FY2015–FY2017), and 69.0% for the “next 3 years” (average of
FY2018–FY2020).
[Fig. 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

22.1

21.1

25.5

25.3

52.5

53.6

11.5

11.1

30.3

29.6

58.3

59.4

80
70
60
50
40
30
20
10

Decrease

No change

Increase

0
FY2016FY2017FY2016

Past 3 years

FY2017

Next 3 years
Survey year

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 FY2015 to FY2017.
Note 3) The “next 3 years” means the period from FY2018 to FY2020.

v

(2) Number of full-time employees■ The percentage of Medium-sized and SMEs (all industries) that increased the number of full-time
employees among all employees for the “past 3 years” (average of FY2015-FY2017) was 52.6%,
which was higher than the previous year’s result (52.4%).
■ The percentage of Medium-sized and SMEs (all industries) expecting to increase full-time employees
among all employees over the “next 3 years” (average of FY2018-FY2020) was 59.9%, which was
higher than the previous year’s result (58.4%).

(Reference: I. Listed Companies)
66.1% for the “past 3 years” (average of FY2015–FY2017), and 68.6% for the “next 3 years” (averageof FY2018–FY2020).
[Fig. 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
90

21.7

21.2

25.8

26.2

52.4

52.6

11.8

11.0

29.9

29.0

58.4

59.9

80
70
60
50
40
30
20
10

Decrease

No change

Increase

0
FY2016FY2017FY2016

Past 3 years

FY2017

Next 3 years
Survey year

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 FY2015 to FY2017.
Note 3) The “next 3 years” means the period from FY2018 to FY2020.

7.

Overseas production ratio (manufacturing industries）■ The “FY2016 actual figures” for the percentage of Medium-sized and SMEs conducting overseas
production was 12.9%, a 0.5 percentage point decrease from the previous year’s survey result(13.4%). The “FY2017 estimate” was 13.1%. The “FY2022 forecast” was 13.6%.
■ The “FY2016 actual figures” for the overseas production ratio of Medium-sized and SMEs was 3.9%,
a decrease from the previous year’s survey result (4.0%). The “FY2017 estimate” was 3.9% and the“FY2022 forecast” was 4.4%.
■ 8.7% of the companies expected the increase in overseas production ratio in the “FY2022 forecast”
compared to the “FY2017 estimate” (the previous year’s survey result, 9.3%.)(Reference: I. Listed Companies)
The percentages of companies conducting overseas production: 70.7% for FY2016 actual figures,
70.7% for the FY2017 estimate, and 69.1% for the FY2022 forecast.
The overseas production ratio: 23.0% for FY2016 actual figures, 23.3% for the FY2017 estimate,and 25.0% for the FY2022 forecast.

vi

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

(%)

(%)

25.0

8.0

20.0
6.0

15.0

12.9

13.6

13.1

4.4

3.9

3.9

4.0

10.0

2.0
5.0
Manufacturing

Material-type

Manufacturing

Material-type

Processing-type

Other

Processing-type

Other

0.0

0.0
2015

2016

2017

2018

2019

2020

2021

2022

(FY)

2015

2016

2017

2018

2019

2020

2021

2022

(FY)

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 FY2017 estimate and FY2022 forecast. For other years, actual result of the previous year innext year’s survey are shown. (For example, the value for FY2016 is the value for “FY2016 actual result” in the FY2017 survey.)

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

[Fig. 2-7-3] The percentage of companies expecting an increase or a decrease in overseas production ratio(manufacturing industries)
(%)
100%

2.5

2.2

88.2

89.2

90%
80%
70%
60%
50%
40%
30%
20%

Decrease

No change

Increase

10%
9.3

8.7

2016

2017

0%
Survey yea r (FY)Note) Increase: “Forecast” – “Estimate” ＞ 0, No change: “Forecast” – “Estimate” = 0, Decrease: “Forecast” – “Estimate” ＜ 0.
(In FY2017, if the values after subtracting “FY2017 estimate” from “FY2022 forecast” of each responding company are plus,
equal, and minus, it is “Increase,” “No change,” and “Decrease.”)

vii

8.

Reverse imports ratio（manufacturing industries）■ The “FY2016 actual figures” for the reverse imports ratio of Medium-sized and SMEs was 27.8%,
an increase from the previous year’s survey result (27.2%).

■ The “FY2017 estimate” was 28.3%, and the “FY2022 forecast” was 26.2%.

(Reference: I. Listed Companies)
17.5% for the FY2016 actual figures, 17.1% for the FY2017 estimate, and 17.5% for FY2022 forecast.

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

40
35
30

27.8

28.3

26.2

25
20
15
10
Manufacturing
Processing-type

5

Material-type
Other

0
2015

2016

2017

2018

2019

2020

2021

2022

(FY)

Note 1) Reverse imports ratio = Export volume to Japan / Volume of overseas local production
Note 2) FY2017 represents the estimate of the actual , FY2022 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 FY2016 is the value for“FY2016 actual result” in the FY2017 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.

Reasons for having an overseas production base (manufacturing industries)■ When combining the “main reasons” for having an overseas production base with “other relevant
reasons” for Medium-sized and SMEs, the top reason was “Labor costs are low” (61.8%). The second
top reason was “Strong demand exists, or demand is forecast to expand, for our products in the local
market(s) and markets in neighboring countries” (46.1%).

(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 (74.8%), and “We can cater effectively tooverseas users’ needs” was the second top reason (51.8%).

[Table 2-9-1] Composition ratio of the reason for having an overseas production base(Main reason + Other relevant reasons)

Manufacturing

Material-type

Other

Processing-type④ Strong demand exists, or① Labor costs are low

61.8(61.0）

demand is forecast to expand,for our products in the local
market(s) and markets in

54.8(54.5)① Labor costs are low

68.8(70.4)① Labor costs are low

65.3(57.4)

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

46.1(49.1)① Labor costs are low

50.0(50.0)⑦ We have entered theentry by our parent enterpriseoverseas market(s) following
entry by our parent enterprise

46.3(34.7)or customer(s) and so onneighboring countries

overseas market(s) following④ Strong demand exists, or⑦ We have entered theoverseas market(s) following
entry by our parent enterprise

37.1(31.8)or customer(s) and so on

or customer(s) and so on

demand is forecast to expand,for our products in the local
market(s) and markets infor our products in the local
market(s) and markets in⑦ We have entered the

36.3(43.9)

overseas market(s) following
entry by our parent enterprisematerials, overall production
overseas users’ needs

33.0(35.8)⑤ We can cater effectively tooverseas users’ needs

35.5(37.9)⑤ We can cater effectively tooverseas users’ needs

35.0(37.8)

processes, distributions, andland/buildings⑤ We can cater effectively tooverseas users’ needs③ We can enjoy low costs ofmaterials, overall production
processes, distributions, andland/buildings③ We can enjoy low costs of

30.4(27.1)

materials, overall production
processes, distributions, andland/buildings

materials, overall production
processes, distributions, andland/buildings

26.5(31.5)
26.5(29.6)⑥We have contracts with

③ We can enjoy low costs of

32.3(25.8)

40.8(37.0)or customer(s) and so onneighboring countries③ We can enjoy low costs of⑤ We can cater effectively to

51.0(51.9)

neighboring countries④ Strong demand exists, or⑦ We have entered the

41.9(34.4)

demand is forecast to expand,

31.3(25.5)

reliable suppliers of parts
and/or raw materials to the
local facilities in a stable

14.3(20.4)

manner

Note 1) The composition ratio of the “Main reason” and “Other relevant reasons” is based on the number of companies that responded.
Note 2) Responding companies can choose one “Main reason,” and up to two “Other relevant reasons.”
Note 3) ( ) shows the previous year's survey results.

ix