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Hope International Development Agency Cow Bank Program

foreign business confidence survey

ABOUT FCIJ AND THE SURVEY
The Foreign Chambers in Japan (FCIJ) is an informal organization comprised of foreign chambers of commerce and business groups in Japan mainly for the purpose of information exchange and enhancement of the activities of the component organizations.

The FCIJ conducted the first Business Confidence survey in April 2002, based on a format developed by the Finnish Chamber of Commerce in Japan (FCCJ). This survey, conducted twice a year, is rapidly becoming a barometer of foreign business in Japan.
This, the fifteenth, survey was conducted between April 13 and 24, 2009.

The survey is headed by a task force consisting of Aron Kremer (ACCJ), Ian de Stains (BCCJ) and Clas G. Bystedt (FCCJ).

PARTICIPATING ORGANIZATIONS
The survey was sent to members at 17 organizations representing about 2,150 foreign affiliated companies and received 451 valid responses, an increase of 8% from the previous survey.

Participating organizations included the ACCJ (American Chamber), ANZCCJ (Australia-New Zealand Chamber), ABC (Austrian Business Council), CCBJ (Brazilian), BCCJ (British Chamber), BLCCJ (Belgian-Luxembourg), CCCJ (Canadian), DCCJ (Danish), DIHKJ (German), FCCJ (Finnish), CCIFJ (French), IJCC (Irish), ICCJ (Italian), NCCJ (Dutch), NoCCJ (Norwegian), SCCJ (Swedish) and SCCIJ (Swiss).

THE RESULTS AND THE REPORT
Although the reported sales and profitability figures for the past six months were the worst in the history of this survey (since 2002) with sales having an index of -0.56 on the scale from +2 to -2 (compared to +0.10 in the fall 2008 survey and profitability - 0.44 (+0.03), this survey shows that the surveyed companies see some bright spots on the horizon.

The economy for the next 6 months is still expected to slide, -0.44 (compared to -0.91 in fall 2008), but looking 12 months ahead, the companies see a turn for the better - the index shows +0.21 (-0.55 in the previous survey). Even more importantly, the forecasts for the coming six months for sales and profitability both show a growth, small but still. The sales forecast index was +0.15 (previous survey -0.05) and that for profitability +0.13 (-0.12). Only 9% expect a further strong decline in sales and profitability, while 48% and 46% respectively see strong of some improvement.

Concerning the strategies of the foreign-affiliated companies in Japan, most of them remain bullish despite the bearish view on the economy and see Japan as a market with room to expand in the long term; 66% looking for further growth and 26% expecting to sustain their current level. 7% are planning to downsize, but only 1% (four companies out of the surveyed 451) are considering withdrawing from the market. These results were very much in line with the findings in the previous survey.

This time three new questions were included. In the first, “What is the most significant problem (apart from the current financial crisis) of your business in Japan? ”, 32% reported “Unclear view of the market”, 27% “Human resources” and 12% “Lack of partners”. In the second, “When do you think the global economy will take a turn for the better?”, 38% predicted spring 2010, 24% this fall. Only 6% expected it to happen this summer. The third additional question was “Does your Japan office also act as Asian HQ for your company”, 70% reported no, 30% yes. Here a rather significant difference was noted between North American companies, where 40% also act as Asian HQ, and European, where only 22% control their Asian business from Japan.

NEXT SURVEY
The next survey will be conducted in October 2009. The results from that survey will be published early November 2009. 

FURTHER INFORMATION
If you need more information regarding the survey, contact your chamber or the FCCJ Office.
Printed versions of the report are also available at the FCCJ Office for a modest fee.