The Journal The Authority on Global Business in Japan


June 2014
Business Confidence Still High
By Megan Waters

surveyMembers of some 17 foreign chambers of commerce and business organizations indicated in the spring 2014 FCIJ Business Confidence Survey that they feel positive about the Japanese economy, although this was a slightly lower level than in the previous survey (October 2013).

The latest index—on a scale of +2 (strong improvement) to -2 (strong decline)—is +0.46 compared with +0.89 for the October poll; indicating that respondents expect the economy to grow over the next six months.

Looking 12 months ahead, the pollees see further growth, on a level similar to that forecast in the previous survey. The index is now +0.70 compared with +0.75 in that survey.

The continuing positive views on the economy were also reflected in the companies’ respective reported and projected performances.

Sales are currently at their highest levels since the spring 2006 survey, while profitability is +0.49, compared with +0.45 in October.

Regarding sales forecasts for the coming six months, respondents were slightly less optimistic: the index is +0.79 (+0.87 in the previous survey).
However, the profitability forecast was stronger than indicated by the October survey (increase from +0.57 to +0.60).

The optimism reflected in the company performance data clearly shows that the strategies of foreign-affiliated companies in Japan remain bullish. Some 81 percent (79 percent in October) of respondents are looking for further growth, 15 percent expect to sustain their current levels, 3 percent are planning to downsize, and 1 percent are considering leaving Japan.

Concerning the consumption tax rate hike, 60 percent of the pollees indicated that they believed it would have little or no negative effect; 25 percent expected it to have a strong, but short-term, effect; while 7 percent anticipated it would have a strong, long-term negative effect.

In terms of the weaker yen, 61 percent of respondents had experienced some, or a strong, negative impact; 26 percent had felt no impact.

The next survey will be conducted in October 2014.



Megan Waters