Key Facts
• Five years after COVID-19 outbreak, yen depreciation boosted export and large company profits.
• SME average sales (2024-25): ¥1.08892 billion; net profit: ¥37.7 million; profit margin: 3.46%.
• Sales growth rate increased 14.4% and profit margin rose 0.84 points from 2019-20.
• Deficit SME rate rose from 21.5% to 23.8%, widening performance gaps.
• Kanto leads recovery: average sales ¥1.7 billion, net profit ¥64.54 million, profit margin 3.7%, sales growth 16.1%.
• Tokyo drives Kanto’s SME performance; Gunma shows strong sales growth across industries.
• Kinki region ranks second in sales and profit growth (15.0% sales growth).
• Hokuriku shows highest profit margin increase (1.22 points) due to construction and transport.
• Tohoku lags: lowest sales ¥646.53 million, net profit ¥13.92 million, deficit rate over 30%.
• Top sales growth by prefecture: Kumamoto 25.5% (TSMC effect), Kyoto 23.1% with strong profit margin rise.
• Agriculture: Kanto leads sales and profit; Hokkaido tops in agricultural sales and profit margin.
• Manufacturing: Kanto highest sales ¥2.57 billion; Kyushu highest sales growth 21.95%.
• Wholesale: Kanto leads sales ¥3.66 billion; Chubu highest profit margin 2.3%.
• Retail: Chubu leads sales growth 22.5%; Kanto highest sales ¥1.4 billion but slow growth.
• Real estate: Kanto leads sales ¥1.7 billion and profit; Chubu highest profit margin 10.92%.
• Transport: Kanto leads sales ¥3.65 billion and profit; Hokuriku notable profit margin rise.
• Information & communication: Kanto leads sales growth 58.8% but profit margin fell to 1.3%.
• Hokuriku and Shikoku maintain high profit margins in information and service sectors.
• Overall, sales growth outpaces profit margin gains; “growth without profit” risks noted.
• Rising costs (materials, labor) inflate sales but limit profit improvements.
• SME performance gaps widen across regions and industries amid inflation and labor shortages.
Summary
Five years after the COVID-19 pandemic, Japan’s small and medium enterprises (SMEs) show uneven recovery across regions and industries. While the Kanto region, led by Tokyo, demonstrates strong sales and profit growth, areas like Tohoku face high deficit rates and sluggish performance. Manufacturing and wholesale sectors in Kanto and Kyushu show notable sales increases, but profit margins often lag due to rising costs. Agriculture benefits from regional strengths, with Hokkaido excelling in profit margins. Real estate and transport sectors highlight urban demand concentration, especially in Kanto and Chubu. Information and communication industries face intense competition, reducing profitability despite rapid sales growth. Overall, sales have increased nationwide, but profit margin improvements are limited, indicating “growth without profit” for many SMEs. Inflation-driven cost pressures and labor shortages contribute to widening disparities among companies. This environment demands SMEs focus not just on sales volume but on improving the quality of growth to sustain profitability in a challenging economic landscape.
