Bank of Japan (BoJ) Tankan Small Manufacturing Outlook

Tankan Small Manufacturing Outlook reflects a survey of small industrial companies in Japan about the business environment and the pace of economic growth for the next quarter. Respondents are asked about business conditions, supply and demand, inventories, production volumes, employment, profit, etc. This is a statistical survey conducted by the Bank of Japan based on the Statistical Law, and it aims to accurately grasp corporate trends throughout the country and to contribute to the appropriate management of monetary policy.

The survey is conducted quarterly among approximately 10,000 small business companies across the country. Small companies, which are defined as follows: in the case of wholesale business, the capital is less than 100 million yen, and the company has less than one hundred employees; in manufacturing and other cases, the capital is less than 300 million yen, and the number of employees is less than three hundred people.

Tankan is investigating items throughout the company's activities, including the actual and predicted values of business plans such as corporate business conditions, economic environment, sales, revenues, and capital expenditures. Respondents can choose from three alternatives, Favorable, Not so favorable, Unfavorable.

Business sentiment in small and medium-sized businesses has fallen sharply after the Lehman shock. However, since then it has been recovering, and the surveys reached the level before the Lehman shock. Wholesale, retail and service industries tend to be flat, and manufacturing and construction industries are in decline.

There are many small and medium sized companies in Japan, but in recent years there are problems of bankruptcy due to the aging of managers and the lack of successors.