Key Factors of 2011 White Paper on Small and Medium Enterprises In

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Key Factors of 2011 White Paper on Small and Medium Enterprises In Provisional Key Factors of 2011 White Paper on Small and Medium Enterprises in Japan July, 2011 Trends among SMEs in 2010 SME Agency The business conditions and production of SMEs were beginning to improve, but have significantly worsened due to the impact of the Great East Japan Earthquake. The business conditions generally tended to improve, but have significantly worsened in March 2011 especially in East Japan. The production generally tended to improve, but has decreased in March 2011; the range of the decrease was the largest-ever. (Year-to-year basis: DI) Business condition DI of SMEs (Seasonal adjustment figure: Manufacturing production index by industry and by size of enterprise ▲ 2005=100) 30.0 160 Industry for electronic parts and All over Japan Steel ▲ 40.0 140 industry Manufacturing Transport Chemical Kanto & industry General machinery Food and cigarette Electric machine ▲ 50.0 Koshinetsu 120 Hokkaido & 100 ▲ 60.0 Tohoku 80 ▲ 70.0 3 4 5 6 7 8 9 10 11 12 1 2 3 4 60 10 11 Year/Month 40 Thick-lines represent SMEs and thin and dotted lines represent large Enterprises. Sources: “Survey of Monthly Business Conditions of Small and Medium Enterprises” by National Federation of Small Business Associations Sources: METI, “Indices of Industrial Production” and “Current Production Statistics Survey”; and SME Agency, “Manufacturing Production Indices by Size of Enterprises” Notes:1. Survey was conducted by the information liaison members appointed at the Prefectural Central Federations (About 2,700 executives and Notes:1. The term is from January 2008 to April 2011. employees of SME associations (such as cooperatives and commercial associations) are assigned to the survey). 2. The figures for large enterprises are calculated from “Indices of Industrial Production”, “Current Production Statistics Survey” and “Manufacturing Production Indices by 2. The business condition DI is a figure obtained by subtracting the percentage of companies that answered “business conditions have worsened” Size of Enterprises”. compared to the same month of the previous year from the percentage of companies that answered “business conditions have improved”. Impact of the Great East Japan Earthquake on SMEs In the Great East Japan Earthquake, various phenomena such as earthquakes, tsunami, and nuclear power plant accidents occurred, which became intertwined in a complex manner and caused wide ranging and enormous impacts on SMEs. There are approximately 80,000 businesses in the tsunami-affected areas, 740,000 businesses in the earthquake-affected area, 8,000 businesses in the evacuation zones of Fukushima Daiichi Nuclear Power (1)Conditions of disaster-affected member companies grasped by the chambers Plant, and 1.45 million businesses in the prefectures covered by Tokyo Electric Power Company. of commerce and industry in Aomori, Iwate, Miyagi, and Fukushima. Number of Companies, Values of Shipments, and Commodity Sales As for the damages of buildings and houses, while total destructions account for approximately 50% in the coastal areas, partial damages account for approximately 80% in the 1.Tsunami-affected Areas 1 2. Earthquake-affected Areas 2 inland areas, showing that greater damages occurred in the coastal areas affected by tsunami. Number of Source: “2009 Economic Census for Business Frame” by the Ministry of Internal Affairs Companies 75,098 Number of and Communication; “2008 Census of Manufacturers” and “2007 Census of Commerce” by (in 2009) Companies 742,462 the Ministry of Economy, Trade, and Industry (in 2009) Notes:1. Among municipalities to which the Disaster Relief Act was applied due to the Values of Conditions of Affected Member Companies 4.4 trillion Values of Great East Japan Earthquake (as of March 24, 2001), the data of 39 municipalities Shipments 35.6 trillion yen Shipments in Aomori, Iwate, Miyagi, and Fukushima that were inundated by tsunami (in 2008) yen Percentages in the number of affected companies and grasped companies (%) (in 2008) according to the “report on the area (approximate value) inundated by tsunami (the Number of Number of Commodity Sales 7.4 trillion Commodity Sales 206.5 trillion 5th report)” published by the Geographic Survey Institute on April 18 were Member Companies (in 2007) yen Total Half Partial (in 2007) yen summarized. As for Sendai City, only the data of Miyagino Ward, Wakabayashi Companies Grasped collapse of collapse of collapse of Harm of Indirect Ward, and Taihaku Ward were summarized. No harm 3. Evacuation Zones of Nuclear 2.Among municipalities to which the Disaster Relief Act was applied due to the Great houses and houses and houses and equipment harm East Japan Earthquake (as of March 24, 2001), the data of municipalities excluding buildings buildings buildings Power Plant Accidents 3 39 municipalities in Aomori, Iwate, Miyagi, and Fukushima that were inundated by Number of 4. Prefectures covered by Tokyo tsunami according to the “report on the area (approximate value) inundated by Coastal 3,344 783 1,763 175 77 0 7,503 18,560 6,142 Companies (in 2009) Electric Power Company 4 tsunami (the 5th report)” published by the Geographic Survey Institute on April 18 as Areas (54.4%) (12.7%) (28.7%) (2.8%) (1.3%) (0.0%) well as the data of Aoba Ward and Izumi Ward of Sendai City were summarized. Number of Values of Shipments 0.3 trillion 3.Data of all areas of Tamura City, Minamisoma City, Kawamata Town, Hirono Town, 191 205 6,256 468 446 0 Companies 1,454,598 Inland Areas 48,596 7,566 (in 2008) yen Naraha Town, Tomioka Town, Kawauchimura, Okuma Town, Futaba Town, Namie (2.5%) (2.7%) (82.7%) (6.2%) (5.9%) (0.0%) (in 2009) Town, Katsuraomura, and Iidatemura were summarized as municipalities including Commodity Sales 0.3 trillion Total 67,156 13,708 3,535 988 8,019 643 523 0 Values of Shipments 111.6 trillion the evacuation zones of Fukushima Daiichi Nuclear Power Plant. (in 2007) yen (in 2008) yen 4. Data on Ibaraki, Tochigi, Gunma, Saitama, Chiba, Tokyo, Kanagawa, Yamanashi and Shizuoka were summarized. Commodity Sales 262.9 trillion Source: Created based on the reports from the Central Federation of Societies of Commerce and Industry (in 2007) yen Notes:1. Figures reported from the chambers of commerce and industry before May 13, 2011 were summarized. 2. It should be noted that the area of a chamber of commerce and industry is the area of the municipality. 3.Few replies were received from the coastal areas of Fukushima, due to the effect of the nuclear power plant accidents. 1 Impact of the Great East Japan Earthquake on SMEs (2)Earthquake-Impacts SMEs (4) Impacts of Lowered Consumption Mind due to Earthquake Many SMEs were affected by shortages of dealing items and price increase as well as Decreases in demands in retail businesses and service industries affected the whole country. lowered consumption mind Impacts of Great East Japan Earthquake Impacts of Earthquake on Demands for Small and Medium-Sized Businesses Affected at present Own company was affected by earthquake 1.1 Likely to be affected in the future Direct impacts Demand decreased (including forecast) Business partners were affected by earthquake 8.0 2.2 Demand slightly decreased (including forecast) Indirect impacts Planned power outage 8.0 0.8 No effect Demand slightly increased (including forecast) Distribution stagnation 6.7 0.1 (Types of Demand increased (including forecast) Not sure Impact on Industries) Troubles in communications and information … 0.5 (Region) infrastructure All 41.9 20.4 10.5 9.2 3.1 14.9 and distribution All 36.0 21.2 7.5 14.9 5.0 15.4 Shortages of dealing items and price increase 35.8 10.0 Hokkaido 45.0 19.8 11.7 6.3 1.8 15.3 Tohoku 49.3 10.7 8.0 12.0 9.3 10.7 Fuel shortage and price increase 6.0 0.4 Retailing 43.9 20.8 9.8 8.93.6 13.1 North Kanto 46.6 15.9 5.7 12.5 4.5 14.8 Impact on behaviors Enhanced voluntary restraint and economy … 24.4 5.2 and mind of business Service industries 41.4 20.3 10.7 9.33.0 15.4 South Kanto 48.1 21.4 8.8 7.6 3.1 11.0 partners and Effect by harmful rumors 1.4 0.2 Hokuriku 29.3 20.7 10.3 20.7 5.2 13.8 consumers Wholesalers 38.6 22.1 7.0 14.3 4.9 13.0 Special demand by earthquake 3.9 1.2 Tokai 41.8 21.3 9.9 10.6 2.1 14.2 Other impacts Kinki 31.9 23.8 9.5 10.5 3.3 21.0 Others 3.42.2 Manufacturers 33.6 22.6 5.8 17.2 5.8 15.0 Chugoku 39.4 25.5 9.6 9.6 0.0 16.0 0 5 10 15 20 25 30 35 40 45 50 Transport and Shikoku 27.3 11.4 20.5 11.4 2.3 27.3 35.0 17.5 5.0 21.5 5.6 15.4 warehouse (%) Kyushu 32.4 17.6 21.1 5.6 2.1 21.1 Source: “Japanese small businesses monthly trend survey” by Japan Finance Corporation (Surveyed in April 2011) 0% 100% Notes: 1. Percentages shown were calculated by using the total of the companies responded as “affected at present” or 0% 100% “likely to be affected in the future” as the denominator. 2. As multiple replies were obtained, the total does not necessarily come to 100%. Source: „Attitude survey on impacts of the Earthquake and reconstruction support‟ by Teikoku Databank, Ltd. (Surveyed in March 2011) 3. This is the results of the survey conducted on 1,395 companies that Japan Finance Corporation deals with Notes :1.Count the number of SMEs only.
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