Japan Press Weekly

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2015 February 11 - 17 [ECONOMY]

SMEs remain stagnant: business circles’ data

The increase in the consumption tax rate to 8% which was implemented in April last year and the increase in costs due to the depreciation of the yen have combined to adversely affect small- and medium-sized enterprises (SMEs), surveys by business organizations show.

The Japan Chamber of Commerce and Industry, a major business organization for SMEs, at the end of last month issued its results of the monthly quick survey of local business outlook, pointing out that SMEs remain stagnant. The survey results revealed that the percentage of smaller companies which responded that their business confidence is improving decreased in January 2015 from the same month the previous year for twelve consecutive months.

The National Federation of Small Business Associations in its monthly survey on SME business performance stated that soaring costs in accordance with higher prices of raw materials and fuel are preventing companies from achieving a profit recovery and that the economic prospects for smaller businesses is still dim.

According to the survey report, a machine maker in Hyogo Prefecture said that even though Abenomics increased production costs, the company cannot shift the increased costs onto its product prices and as a result, its profit is declining. Another respondent of a local shop owners’ association, said that its member retailers can hardly see any sign of an economic recovery.