Annual Survey of Corporate Behavior(Summary)FY2003(April 28,2004)
- Japanese
- English
Investigation outline
(1)Period of investigation : January 2004
(2)Survey items:
(i) management environment and basic management policy
(ii) structure and challenges for profit recovery
(iii) efforts to improve international competitiveness
(3)Coverage: all companies listed on the First and Second Section of the Stock Exchange in Tokyo, Osaka and Nagoya (2,473 companies)
(4)Survey method: self-reporting mailing method using designated survey form
(5)Number of responding companies: 1,243 companies (689 manufacturers, 554 non-manufacturers)
(6)Response rate: 50.3%.
Main points of the survey results
1. Improvement in outlook of growth rate and capital investment.
The real economic growth rate outlook by business enterprises was 1.4% for the next fiscal year(2004), 1.5% (yealy average) for the coming 3 fiscal years (fiscal year 2004 - 2006), and 1.6% (yealy average) for the coming 5 fiscal years (fiscal year 2004 - 2008). Regarding capital investment, the average growth rate for a single fiscal year in the coming 3 years on an all-industry basis was 3.1%, incrementing its growth rate from the previous survey result of 2.4%. The average growth rate for a single fiscal year in the coming 3 years for IT investment was 5.9%, compared to 6.4% during the past 3 years, showing prospects for deceleration of the growth rate. Regarding the overseas production ratio, in the manufacturing industry as a whole there was a slight decrease in fiscal year 2002 which resulted in 13.2% in actual figures compared to 13.7% in actual figures for fiscal year 2001. However, the estimate of actual figures for fiscal year 2003 is 14.1% and the outlook for fiscal year 2008 is 17.8%, showing an unchanged rising tendency for future prospects. The break-even exchange rate for exporting companies is 105.9 yen/dollar.
2. 40% of business enterprises with growing revenues and profits. A pause in employment reduction.
The situation of earnings of business enterprises is as follows. Companies with growing revenues and profits which increased its sales and operating profits was 39.4%, companies with growing revenues and falling profits was 8.3%, companies with falling revenues and profits was 28.7%. The most effective measure to raise operating profits was "reduction of fixed costs" for 43.6% of the companies, "increase in sales volume" for 24.0%, "reduction of variable costs" for 20.7%, "increase in unit price" for 5.7%. Thus, it became clear that cost reduction was what most contributed to raise operating profits for many companies. The most frequent response as the most effective measure adopted to reduce costs was "reduction in personnel costs" at 47.9%. Furthermore, in the past 3 years, the variation of the number of full-time employees fell 3.4% while the number of part-time and temporary staff grew 2.2%, showing a tendency for companies to cut full-time employees and increase part-time and temporary staff. The outlook for the coming 3 years is a 0.8% decrease in the number of full-time employees and a 2.3% increase in the number of part-time and temporary staff. Thus, the reduction rate of full-time employees is expected to contract. Regarding the progress situation of company restructuring, 43.1% of the companies responded "further restructuring is necessary", 31.4% responded "(we are reaching the limits to restructuring and therefore) further restructuring is difficult", and 18.7% responded "restructuring is not necessary to begin with".
3. The expanding presence of China. Many companies have greater international competitiveness than 3 years ago.
The regions where the main products of Japanese companies compete with foreign companies are "China (excluding Hong Kong)" (79.2%), "NIES" (75.7%), "North America" (74.4%), "Europe" (70.7%), in this order. Although the percentage of competition increased in all regions compared to the Fiscal Year 2001 Survey, it grew in the Asian region, especially in China. The regions of the products with which Japanese products compete, are "Europe" (68.5%), "North America" (67.5%), "China (excluding Hong Kong)" (63.7%), "NIES" (60.7%), in this order. In comparison to the Fiscal Year 2001 Survey, the percentage of competition with products of all of the regions is increasing and the increasing margin is high in products from North America, China and NIES. When comparing the evolution of international competitiveness during the past 3 years, 32.0% of companies responded "competitiveness increased compared to 3 years ago", exceeding the response "competitiveness decreased compared to 3 years ago" (21.1%). The most frequent explanation for greater competitiveness was "superior product development capacity than rival companies" with 60.5% of the response. On the other hand, the most frequent explanation for less international competitiveness was "superior cost reduction efforts of rival companies" with 42.6% of the response. In terms of the perspective of future international competitiveness, 59.4% of the companies responded that "we have prospects that the company possesses equal competitiveness as rival companies". This demonstrates that the majority considers that their company will possess competitiveness which equals that of foreign companies in the future. On the other hand, 26.4% of the companies responded that "we have prospects to surpass rival companies", exceeding the response "we have prospects that the company still does not stand up to rival companies" (10.3%).