The Shoko Chukin Bank, in collaboration with the Shoko Research Institute, released the 200th National Small and Medium Enterprise Business Sentiment Survey results. The survey revealed that the business sentiment index for SMEs in the April-June 2025 quarter improved by 0.3 points from the previous quarter to 47.8. While this marks the second consecutive quarterly improvement, the index remains below the 50-point threshold that separates expansion from contraction. By industry, manufacturing showed a notable recovery with a 3.3-point increase to 44.0, driven by improvements in machinery and metal products sectors. However, non-manufacturing declined by 1.0 point to 49.7, with retail and services sectors showing particular weakness. Regional disparities were evident, with the Kanto region showing stronger performance while western Japan lagged. Looking ahead, SMEs expect continued gradual improvement, though concerns remain about rising material costs, labor shortages, and the impact of global economic uncertainties. The survey, which has been conducted quarterly since 1975, provides valuable insights into the health of Japan's SME sector, which accounts for over 99% of all businesses and approximately 70% of employment in the country.
SME Business Sentiment Report: 200th National SME Business Sentiment Survey Shows Slight Improvement in April-June Quarter
Overview
The Shoko Chukin Bank, in collaboration with the Shoko Research Institute, released the 200th National Small and Medium Enterprise Business Sentiment Survey results. The survey revealed that the business sentiment index for SMEs in the April-June 2025 quarter improved by 0.3 points from the previous quarter to 47.8. While this marks the second consecutive quarterly improvement, the index remains below the 50-point threshold that separates expansion from contraction. By industry, manufacturing showed a notable recovery with a 3.3-point increase to 44.0, driven by improvements in machinery and metal products sectors. However, non-manufacturing declined by 1.0 point to 49.7, with retail and services sectors showing particular weakness. Regional disparities were evident, with the Kanto region showing stronger performance while western Japan lagged. Looking ahead, SMEs expect continued gradual improvement, though concerns remain about rising material costs, labor shortages, and the impact of global economic uncertainties. The survey, which has been conducted quarterly since 1975, provides valuable insights into the health of Japan's SME sector, which accounts for over 99% of all businesses and approximately 70% of employment in the country.