Cabinet Office

Press Release
March 29, 2019
Economic and Social Research Institute

FY2018 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)
7,672 enterprises (randomly selected from the establishment frame database)2,972 (1,343 in manufacturing industries, 1,629 in non-manufacturing industries)

Response rate

38.7%

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 2019 (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 (all industries, actual value average) for the “next fiscalyear” (FY2019) was 1.2%, higher than the previous year’s survey result (1.1%).

■ The nominal economic growth rate forecast (1.5%) was higher than the real rate forecast (1.2%),
suggesting that future price increase has been taken into consideration.
Note: “Actual value average” is simple average.

(Reference: FY2018 Annual Survey, I. Listed Companies [the same shall apply hereinafter])
The real and nominal economic growth rate forecasts for the “next fiscal year” were 1.1% 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 (allindustries, actual value average) for the “next fiscal year” (FY2019) was 1.0%, forecasting
positive growth. The figures for the manufacturing industries and non-manufacturing industries
were 1.0% and 1.1%, respectively.
■ The medium-term forecasts for the “next 3 years” and the “next 5 years” were 1.0% and 0.9%,
respectively.
■ In terms of the forecasts for the “next fiscal year” by sector, the growth rate forecast of the
manufacturing industries was high in “Electric Appliances” (1.5%) and “Precision Instruments”(1.5%), and that of the non-manufacturing industries was high in “Insurance” (1.6%) and“Information & Communication” (1.3%).
(Reference: I. Listed Companies)
The real growth rate forecast for the “next fiscal year” was 1.2% (1.2% 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 1.2% and 1.1% respectively.

<Contact Information>
Department of Business Statistics, Economic and Social Research Institute, Cabinet Office(Survey page: https://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)
FY2017 survey
FY2018 survey

(%)

3.0

2.0
1.2
0.9

1.1

Non-manufacturing

Other

0.8 0.8

Processing-type

All industries

0.0

Material-type

1.0

Manufacturing

1.1
0.9 1.00.9 1.0 0.91.0[Fig. 2-2-2] Real growth rate forecasts of industry demand by sector (next fiscal year)
(%)

2.0

1.0

Retail Trade

Other Products

Textiles & Apparels

Pulp & Paper

Fishery, Agriculture & Forestry

Foods

Glass & Ceramics Products

Pharmaceutical

Land Transportation

Metal Products

Marine Transportation

MiningWholesale Trade

Rubber Products

Transportation Equipment

Services

Securities & Commodity Futures

Electric Power & Gas

Chemicals

MachineryIron & SteelOil & Coal Products

Other Financing Businesses

Air Transportation

Nonferrous Metals

Real Estate

Construction

Precision Instruments

Information & Communication

Insurance

Exchange Rates

Warehousing & Harbor Transportation Services

3.

Electric Appliances-1.0

All industries

0.0(1) Forecast yen-dollar rate

■ The forecast yen-dollar rate after 1 year (around January 2020) for Medium-sized and SMEs (allindustries, class value average) was 111.7 yen/dollar. This was a 2.1 yen appreciation comparedwith the previous year’s survey result (113.9 yen/dollar).

■ Compared with the yen-dollar rate for the month immediately before the survey (112.5 yen/dollar
in December 2018), the forecast appreciated by 0.7 yen.
Note: “Class value average” is simple average of the median value of each class selected fromamong the choices.

(Reference: I. Listed Companies)
The forecast yen-dollar rate after 1 year was 111.2 yen/dollar. Compared with the yen-dollar rate
for the month immediately before the survey (112.5 yen/dollar), the forecast appreciated 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 106.9 yen/dollar. This was a 0.6 yen depreciation compared with the previous year’s
survey result (106.4 yen/dollar).
■ In terms of the break-even yen-dollar rate by industry, the rates of the manufacturing industries andthe non-manufacturing industries were 106.3 yen/dollar and 109.1 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 6.2 yen and 3.4 yen,respectively.
■ In terms of the break-even yen-dollar rate by sector, compared with the all industries average, sectors
such as “Electric Power & Gas” (115.3 yen/dollar) and “Land Transportation” (114.0 yen/dollar) set
weaker break-even rates, while sectors such as “Pharmaceutical” (101.2 yen/dollar) and “Retail Trade”(101.9 yen/dollar) set stronger rates.

(Reference: I. Listed Companies)
The break-even yen-dollar rate of exporting companies was 99.8 yen/dollar (98.9 yen/dollar for
manufacturing industries, and 104.6 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 13.6 yen and 7.9 yen, respectively.
[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

111.7

110

111.7

106.9

112.1

106.3

111.6
106.1

111.8

111.5
106.1

109.1

106.8

100
90
80

Non-manufacturing

Other

Processing-type

Material-type

All industries

60

Manufacturing

Yen-dollar rate in the month immediately before
the survey (Dec.2018) : 112.5 yen/dollar

70[Fig. 2-3-2] Break-even yen-dollar rate by sector(yen/dollar)
All industries average : 106.9 yen/dollar
120
104.9

110
100

104.4 104.5

115.3
111.6
114.0
109.3 110.6110.6
111.8
106.1
106.5
105.2
108.1
107.5
106.8
107.9
108.7109.0
107.8
107.4
106.4
106.6
105.1
105.8

101.2 101.99080Stronger yen than averageiiiElectric Power & Gas

Land Transportation

Warehousing & Harbor Transportation Services

Real Estate

Weaker 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.

Other Financing Businesses

Securities & Commodity Futures

Textiles & Apparels

Other Products

Wholesale Trade

Marine Transportation

Pulp & Paper

Glass & Ceramics Products

Services

Machinery

Foods

Information & Communication

Rubber Products

Precision Instruments

Transportation Equipment

Metal Products

Iron & Steel

Nonferrous Metals

ChemicalsElectric Appliances

Construction

Retail Trade

60

Pharmaceutical

70

4.

Prices■ Average purchase prices after 1 year for Medium-sized and SMEs (all industries, class value average)
increased by 3.3% (while the previous year’s survey result was 3.2%).

■ Average sales prices after 1 year for Medium-sized and SMEs (all industries, class value average)
increased by 1.8% (while the previous year’s survey result was 1.6%).

■ Purchase price increases surpassed sales price increases for Medium-sized and SMEs, and terms oftrade (all industries) were forecast to worsen by 1.5 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 1.5%. The terms of trade were forecast to worsen by 1.0 percentage point.
[Table 2-4-1] Terms of trade by industry（％、％points）

Average purchase price

Average sales price

FY2018surveyFY2017
surveyFY2018surveyFY2017
surveyFY2018surveyFY2017
survey

3.3

3.2

1.8

1.6

-1.5

-1.6

3.6

3.5

1.7

1.6

-1.9

-2.0

Material-type

3.7

3.9

2.4

2.2

-1.3

-1.7

Processing-type

3.2

2.8

0.9

0.8

-2.3

-2.0

Other

3.8

3.7

1.8

1.6

-2.0

-2.2

3.0

2.8

1.9

1.7

-1.2

-1.1

All industries

Industry

ManufacturingNon-manufacturing

Terms of trade

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 FY2018 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 FY2016-FY2018) was 66.0%, which was higher than the previous year's
survey result (64.0%).

■ The percentage of Medium-sized and SMEs (all industries) expecting to increase capital investment
over the “next 3 years” (average of FY2019–FY2021) was 64.6%, which was lower than the previous
year’s survey result (65.2%).

(Reference: I. Listed Companies)
77.0% for the “past 3 years” (average of FY2016–FY2018), and 69.2% for the “next 3 years” (average of
FY2019–FY2021).
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

8.9

9.5

8.0

7.4

19.6

17.7

64.0

66.0

10.1

9.4

9.9

9.0

7.6

8.5

17.8

17.0

65.2

64.6

80
70

18.8

18.8

60
50
40
30

62.8

No ca pital investment was made./No capital investment is pla nned.

20

Decrease
No change

10
0

62.2

Increase

FY2016FY2017FY2018FY2016

Past 3 yea rs

FY2017FY2018

Next 3 yea rs

Survey year(FY)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 FY2016 to FY2018.
Note 3) The “next 3 years” means the period from FY2019 to FY2021.

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 FY2016–FY2018) was 53.4%, which was lower than the previous year’s survey result(53.6%).
■ The percentage of Medium-sized and SMEs (all industries) expecting to increase employees over the“next 3 years” (average of FY2019–FY2021) was 58.7%, which was lower than the previous year’s
survey result (59.4%).

(Reference: I. Listed Companies)
69.5% for the “past 3 years” (average of FY2016–FY2018), and 69.3% for the “next 3 years” (average of
FY2019–FY2021).
[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

24.2

52.5

53.6

53.4

22.4

11.5

11.1

12.2

30.3

29.6

29.0

58.3

59.4

58.7

80
70
60
50
40
30
20

Decrease

100FY2016FY2017FY2018

Past 3 years

FY2016

No change

FY2017

Increase

FY2018

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 FY2016 to FY2018.
Note 3) The “next 3 years” means the period from FY2019 to FY2021.

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 FY2016-FY2018) was 53.3%,
which was higher than the previous year’s result (52.6%).
■ 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 FY2019-FY2021) was 58.6%, which was
lower than the previous year’s result (59.9%).

(Reference: I. Listed Companies)
68.4% for the “past 3 years” (average of FY2016–FY2018), and 68.8% for the “next 3 years” (averageof FY2019–FY2021).
[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

21.4

25.8

26.2

25.3

52.4

52.6

53.3

11.8

11.0

12.1

29.9

29.0

29.2

58.4

59.9

58.6

80
70
60
50
40
30
20
Decrease

100FY2016FY2017FY2018FY2016

Past 3 years

No change

FY2017

Increase

FY2018

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 FY2016 to FY2018.
Note 3) The “next 3 years” means the period from FY2019 to FY2021.

7.

Overseas Production Ratio (Manufacturing Industries）■ The “FY2017 actual figures” for the percentage of Medium-sized and SMEs conducting overseas
production was 12.0%, a 0.9 percentage point decrease from the previous year’s survey result(12.9%). The “FY2018 estimate” was 12.1%. The “FY2023 forecast” was 12.4%.
■ The “FY2017 actual figures, actual value average” for the overseas production ratio of Medium-sized
and SMEs was 3.7%, a decrease from the previous year’s survey result (3.9%). The “FY2018
estimate” was 3.7% and the “FY2023 forecast” was 4.1%.
■ 7.5% of the companies expected the increase in overseas production ratio in the “FY2023 forecast”
compared to the “FY2018 estimate” (the previous year’s survey result, 8.7%.)(Reference: I. Listed Companies)
The percentages of companies conducting overseas production: 68.3% for FY2017 actual figures,
67.7% for the FY2018 estimate, and 65.2% for the FY2023 forecast.
The overseas production ratio: 22.9% for FY2017 actual figures, 22.7% for the FY2018 estimate,and 23.8% for the FY2023 forecast.
vi

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

(%)

25.0

8.0

20.0
6.0

15.0

3.7

4.0

12.0

10.0

12.1

4.1

3.7

12.4
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

2023

2015

(FY)

2016

2017

2018

2019

2020

2021

2022

2023 (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 FY2018 estimate and FY2023 forecast. For other years, actual result of the previous year innext year’s survey are shown. (For example, the value for FY2017 is the value for “FY2017 actual result” in the FY2018 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

1.8

88.2

89.2

90.7

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

20%

No change

Increase

10%
0%

9.3

8.7

7.5

2016

2017

2018

Survey year (FY)Note) Increase: “Forecast” – “Estimate” ＞ 0, No change: “Forecast” – “Estimate” = 0, Decrease: “Forecast” – “Estimate” ＜ 0.
(In FY2018, if the values after subtracting “FY2018 estimate” from “FY2023 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 “FY2017 actual figures, actual value average” for the reverse imports ratio of Medium-sized
and SMEs was 27.2%, a decrease from the previous year’s survey result (27.8%).

■ The “FY2018 estimate” was 25.7%, and the “FY2023 forecast” was 24.6%.

(Reference: I. Listed Companies)
17.7% for the FY2017 actual figures, 17.7% for the FY2018 estimate, and 17.3% for FY2023 forecast.

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

40
35

27.2

30

25.7

24.6

25
20
15
10
5

Manufacturing

Material-type

Processing-type

Other

0
2015

2016

2017

2018

2019

2020

2021

2022

2023

(FY)

Note 1) Reverse imports ratio = Export volume to Japan / Volume of overseas local production
Note 2) FY2018 represents the estimate of the actual , FY2023 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 FY2017 is the value for“FY2017 actual result” in the FY2018 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” (53.4%). 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” (46.0%).

(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 (70.8%), and “We can cater effectively tooverseas users’ needs” was the second top reason (48.6%).

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

Material-type

Processing-type④ Strong demand
exists, or demand isforecast to expand, forour products in the local
market(s) and markets
in neighboring countries

50.0(54.8)① Labor costs are low

48.1(50.0)⑦ We have entered theoverseas market(s)following entry by ourparent enterprise orcustomer(s) and so on

Other

58.7
(68.8)④ Strong demand
exists, or demand isforecast to expand, forour products in the local
market(s) and markets
in neighboring countries

55.1(51.0)

46.7(46.3)① Labor costs are low

51.0(65.3)

37.3(36.3)⑦ We have entered theoverseas market(s)following entry by ourparent enterprise orcustomer(s) and so on

40.8(40.8)① Labor costs are low

53.4(61.8)④ Strong demand
exists, or demand isforecast to expand, forour products in the local
market(s) and markets
in neighboring countries

46.0(46.1)① Labor costs are low⑦ We have entered theoverseas market(s)following entry by ourparent enterprise orcustomer(s) and so on

42.6(41.9)⑤ We can catereffectively to overseas
users’ needs

44.2(35.5)④ Strong demand
exists, or demand isforecast to expand, forour products in the local
market(s) and markets
in neighboring countries⑤ We can catereffectively to overseas
users’ needs

33.5(33.0)⑦ We have entered theoverseas market(s)following entry by ourparent enterprise orcustomer(s) and so on

38.5(37.1)⑤ We can catereffectively to overseas
users’ needs

33.3(35.0)③ We can enjoy low
costs of materials,
overall production
processes, distributions,and land/buildings

26.5(26.5)③ We can enjoy low
costs of materials,
overall production
processes, distributions,and land/buildings

27.8(30.4)③ We can enjoy low
costs of materials,
overall production
processes, distributions,and land/buildings

26.9(32.3)③ We can enjoy low
costs of materials,
overall production
processes, distributions,and land/buildings

29.3(31.3)⑤ We can catereffectively to overseas
users’ needs

22.4(26.5)

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