29.3% of companies anticipate “increase in income and profit” for 2018


- Companies evaluate Abenomics at 62.4 points, 0.7 points down from a year ago -

The domestic economy has been expanding because of export expansion as a result of the recovery of world economy and an increase in capital investment, etc. However, a serious labor shortage and increasing cost burden, such as a raw material price hike, are of concern for inhibiting economic growth, while the effect that business trends have on performance varies depending on region, industry, and size.

Teikoku Databank has conducted a survey of corporate attitudes towards the performance outlook for 2018. This survey was conducted in conjunction with the March 2018 TDB Trends Research.

*Survey period: March 16 – March 31, 2018, Companies Surveyed: 23,137, Valid Responses: 10,094 (Response Rate: 43.6%). The survey for the performance outlook has been conducted every year since March 2009, and this is the tenth survey.

*Details of this survey can be found on the dedicated Economic Trend Survey HP(http://www.tdb-di.com).

Survey results (Summary)

1. 29.3% of companies anticipate “increase in income and profit” in the performance outlook for 2018. This increased for the second consecutive year, and to a level close to that of the 2014 outlook (30.5%), which was a record high, while those anticipating a “decrease in income and profit” fell by 1.0 point. The gap between large companies and SMEs in terms of “increase in income and profit” is widening. Recovery in corporate performance in 2018 is expected to be mainly in large companies.

2. With respect to downside factors in the performance outlook for 2018, “serious labor shortage” at 39.3% ranked top, followed by “further downturn in consumer spending,” and “trends in crude oil and material prices.” This suggests that companies are strongly concerned about securing and retaining their labor force in the context of a labor shortage in a tight labor market. Conversely, “recovery in consumer spending” was ranked top among upside factors, at 33.0%, for the seventh year in a row, followed by “increase in public works” and “increase in income.”

3. Companies evaluate the achievements of the economic policies of the Abe Administration (Abenomics) at 62.4 out of 100 points. Although companies generally gave an evaluation of more than 60 points for Abenomics over the last five years, SMEs continue to view Abenomics more harshly, and the level of evaluation by companies has fallen from a year ago.

Appendix

1.Research Subjects(Companies Researched 23,137 ; Valid responses: 10,094 ; Response rate: 43. 6%)

2.Research Items

*Business Confidence (current, in 3 months, in 6 months, in 1 year)

*Business Conditions (sales, purchasing and selling unit price, inventory, capacity utilization ratio, number of employees, overtime work hours)

3.Research Period and Methodology

Internet-based survey conducted March 16 – 31 2018

The explanation of the Economic Diffusion Index

Research Purpose/Researched Terms

TDB Economic Trend Research (started from May 2002) is a monthly statistical survey conducted for over 20,000 nationwide corporations on their general business activities including the current condition and future outlook of the industry business performance and operating climate. The primary purpose of such a survey is to assess the current state of Japan’s economy.

Selection of the Subject Corporations

Companies of all sizes in all domestic industries are eligible to participate in the survey.

DI Formula

The DI (Diffusion Index) is calculated by attaching a number (in parenthesis in the diagram below) to each of seven possible responses. Then multiplying the percentage of each response by the appropriate number, and adding the results.

A DI over 50 is in the range of “Good.” A score under 50 is “Bad.” The number 50 is the dividing point (“Neither Good or Bad”). All numbers are rounded off to the hundredth. It should be noted that no weight is given to a company’s responses based on its size. Calculations are made according to a “one company, one vote” rule.

.

For example, all corporations rated ‘Very Good’.

DI=6/6x100(%)=100

All corporations rated ‘Neither Good nor Bad’.

DI=3/6x100(%)=50

Size Classification

#JapaneseEconomy #JapanEconomicTrendResearch

Featured Posts
Posts Are Coming Soon
Stay tuned...
Recent Posts
Archive
Search By Tags
No tags yet.
Follow Us
  • Facebook Basic Square
  • Twitter Basic Square
  • LinkedIn Social Icon
  • Facebook Basic Black
  • LinkedIn Basic Black
  • Twitter Basic Black

© 2017 Teikoku Databank America, Inc. All rights reserved.