Tankan Small Manufacturers Index

The Tankan Small Manufacturers Index is the Business Conditions diffusion index for small factories. It belongs to the Short-Term Economic Survey of Enterprises in Japan (Tankan). The Bank of Japan runs it each quarter. It covers private firms with capital of 20 million yen or more, excluding financial institutions, business consultants and pure holding companies.

It focuses on factories in 17 industries with capital of 20 million yen to less than 100 million yen. Each firm reports on a non-consolidated basis in a sample of about 10000 firms, judging conditions mainly on profits. It picks Favorable, Not so favorable or Unfavorable for now and 3 months ahead.

Surveys run in March, June, September and December. Results appear in early April, July and October and mid-December in principle. Release spreads over 2 business days. Summary and Outline appear at 8:50 Japan Standard Time, before markets open at 9:00.

The Comprehensive Data Set follows at 8:50 on the next business day. Collection lasts about 1 month from dispatch to release. A reply deadline falls about 2 weeks after dispatch. The Bank chases missing replies and reviews them until 1 business day before release.

Each cycle also shows large, medium and all-firm results with forecasts for 3 months ahead. It adds sales, profits, investment, predicted exchange rates and response counts. Corrections appear swiftly in principle, except revisions firms make after release.

The headline moves with demand, stock, capacity, labour, funding and price judgments.

• Domestic supply and demand conditions: track home demand for products and orders.
• Overseas supply and demand conditions: show the same balance for products overseas.
• Own and wholesalers inventory levels: compare own and distributor stocks against sales.
• Production capacity: describe excess or shortage of equipment, excluding short stops for repairs.
• Employment, funding, lending and interest: combine staff levels, cash ease, bank attitude and rate changes.
• Output and input price changes: follow price changes from 3 months earlier to 3 months ahead, excluding seasonal factors.

The December 2023 survey, released December 13, 2023, drew replies from November 9 to December 12, 2023. It reached 1 point in December after minus 5 in September 2023. It beat the minus 2 December forecast from September, released October 2, 2023, by 3. It forecast minus 1 for March 2024, down 2 from December.

It stayed near balance after a jump of 6, with a fall expected next time. Home demand was minus 20 from minus 21 and overseas was minus 17 from minus 15. Stocks were 17 from 19, output prices were 26 from 30 and input prices were 56 from 61. The gap was 30, showing cost pressure.

Employment was minus 38 from minus 36, financial position was 7 from 8 and lending was 14 unchanged. Large manufacturing was 12 from 9 and small nonmanufacturing was 14 from 12. Small factories lagged the rest by 11 to 13 near balance.

1. Population: cover private firms with capital of 20 million yen or more in 93 groups by industry and size.
2. Collection: mail forms or online codes to all sample firms. Chase missing firms and review until 1 business day before release. Set a reply deadline about 2 weeks after dispatch.
3. Diffusion index: subtract the bottom share from the top share. An example with 30, 60 and 10 gives 20 points.
4. Gaps, rounding and weighting: drop firms missing present or forecast views from both counts. Round shares to whole numbers for each grouping. Count one firm as one vote with no sales weighting.
5. Seasonal factors and reading: apply no seasonal fix. Firms answer excluding seasonal swings. Zero (0) means balance, positive leans to the top choice and negative to the bottom within 100. Compare the next actual with the prior forecast.