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2011 Vol.1
Business Sentiment Reflected in Statistical Data


This paper examines the business sentiment reflected in statistical data based on the “Business Outlook Survey” conducted jointly by the Ministry of Finance and the Cabinet Office. The three main findings are as follows.
First, the Business Survey Index (BSI) captures companies’ sentiment toward their business and is one of the variables used for judging the economy’s condition. Before using the index, it is necessary to understand that the BSI crosses the value 0 at turning points of the economy. Second, the BSI for own business sentiment among large companies has the following characteristics. (1) By applying seasonal adjustments, consistency between the behavior of the BSI and that of other economic indicators becomes clear, and the occurrence of turning points of the economy is accurately observed. (2) A hike in primary commodity prices was a significant negative factor for judging own business sentiment around the mid-noughties.
Third, the following points should be noted as characteristics of small and medium-sized companies reflected in the BSI. (1) The inventory rate for small and medium-sized companies has stabilized recently. This contrasts with a dramatic increase in inventory experienced by large companies which occurred at the time of the “Lehman shock” when their inventory rate had been following a downward trend. (2) Small and medium-sized companies are perceiving a shortage of facilities and equipment more strongly than large companies. This is due to the former’s low profit margin and the possibility that their facilities and equipment are aging because of low levels of investment which lasted for a long time. (3) Small- and medium-sized companies are perceiving an excess of regular employees more strongly than large companies because, unlike the latter, the former has not seen an increase in sales per employee. However, small- and medium sized companies have increased the number of temporary and part-time workers, while large companies have decreased the number of such workers.