jetro’s 2014 survey on business conditions of japanese ... · [processed food, agricultural or...

Copyright (C) 2015 JETRO. All rights reserved. 1

Results of JETRO’s 2014 Survey on

Business Conditions of Japanese-Affiliated Firms

in the U.S.

January, 2015

Japan External Trade Organization (JETRO)

Overseas Research Department

North America Division


About the Survey

This survey has been conducted since 1981 by the JETRO offices in the U.S, with this

being the 33rd implementation (there was no survey conducted in 2004).

1. Purpose

To survey and analyze the state of Japanese-affiliated companies in the United States

(business confidence, performance, management challenges.,etc) with the aim of

facilitating business activities and management strategy planning for

Japanese-affiliated companies.

2. Survey Coverage

The definition of a “Japanese-affiliated company” is one for which “the investment

from the Japanese parent company is at least 10%,” including both direct and indirect

investments. For example, consider a Company A, which is an American subsidiary

with a Japanese parent company that holds a 20% share. If Company A itself holds a

50% share of a subsidiary, Company B, then the parent Japanese company for Company

A owns a 10% share of Company B (0.2 x 0.5 x 100), so that Company B would also be

regarded as a “Japanese-affiliated company.” (Company B is a sub-subsidiary of the

parent Japanese company.) The same type of calculation applies to sub-sub-subsidiaries

as well.

3. Method

The target companies were contacted by one of the six offices in the U.S. (New York,

San Francisco, Los Angeles, Chicago, Houston, and Atlanta) and informed of an

Internet address (URL) where the questionnaire was posted. Respondents entered their

answers directly onto the survey form on this website.

4. Period

September 3 to October 17, 2014

5. Response rates

The requests were made to 1,016 Japan-affiliated companies in the U.S., with responses

received from 669, for a response rate of 65.8%

Note: The number of companies responding is an aggregate based on the cooperation of

each company, using information sources regarded as reliable by the JETRO offices, but

the absolute accuracy and completeness of the information cannot be guaranteed.


1. Business Conditions

○ In 2014, Japanese manufacturers operating in the U.S. showed even higher

business confidence than the previous year, indicated by a rise of the diffusion

index (DI) from 31.7 points to 33.4 points. Business performance was strong

especially in transportation equipment and components, steel, and general

machinery. More than 80% of those responding expect to show a profit in 2014.

Although there was some concern voiced about the future of the economy with the

changes in U.S. monetary policy, most companies felt that the economy is

recovering because of increased orders.

- Regarding the forecast of operating profits for 2014 in comparison to 2013, 49.8% of

respondents expected improvement, 33.8% expected to remain the same, and 16.4%

expected a decrease (Fig. 2). The expectation of improvement was particularly

noticeable in the fields of transportation machines (cars and motorcycles) (64.7%),

parts for transportation machines (58.1%), steel (53.8%), and general machinery

(including molds and power tools) (53.3%). The recovery of the automotive market

and revival of manufacturing has had a large impact. By region, improvement was

expected by many of the Japanese-affiliated firms in the southern areas where

shale oil/Shale gas is being aggressively developed. The diffusion index (DI) that

indicates business confidence (proportion of businesses reporting increased

operating profits minus those reporting decreased operating profits compared to the

previous year) was 33.4 for 2014, an increase from 31.7 last year (Fig. 1).

- The most selected reasons given for improved operation profit compared to 2013, in

order of frequency (multiple answers permitted), were “Sales increase in local

markets” (81.5%), “Improvement of production efficiency” (30.6%), and “Reduction

of procurement costs” (26.4%) (Fig 3). In comparison, the reasons cited for decreases

were “Sales decrease in local markets” (45.0%), “Increases of labor costs” (34.9%),

and “Increase of procurement costs” (24.8%).

- With regard to operating profits in 2014, 82.3% reported being profitable, 9.9%

reported “break even,” and 7.8% expected a loss (Fig. 5). These are the best figures

obtained since the survey was started in 1991.

- The answers about forecasts for operating profit in 2015 compared to 2014 indicate

that 52.8% of companies expect an increase, 39.2% expect to remain the same, and

8.0% expect a decline (Fig. 2). The reasons for the improvement, in order of

frequency (multiple answers permitted) were “Sales increase in local markets”

(83.0%), “Improvement of production efficiency” (37.1%), and “Reduction of

procurement costs” (21.3%) (Fig. 6). Reasons for an expected decrease were “Sales

decrease in local markets” (58.5%), “Increase of labor costs” (30.2%), and


“Production costs insufficiently reflected in selling price of goods” (30.2%) (Fig. 7).

<Although there are still serious concerns about the future of the U.S. economy, the

increase in orders conveys a sense of economic recovery>

*The comments indicated by arrowhead bullet points in the main text (type of industry

indicated in parentheses) are quotes from interviews with the firms that responded to

the questionnaire, and, in part, comments on the survey questionnaire.

Orders from companies based in Silicon Valley have been steadily increasing, so we

feel that the economy is improving. [Chemical/Petroleum products]

Unit sales, including by competitors, have increased, creating delays in delivery of

domestically procured raw materials. [Electric or electronic parts]

Sales at retail outlets are improving. Wealthy Asians seem to be driving the

consumption. [Processed food, agricultural or fishery products]

We can sense the economic recovery from how smoothly business is going. On the

other hand, there is concern about what will happen next year after the easy

monetary policy measures end. [Metal goods (including plated products)]

The growth of industries in which we sell our products is probably related to the

state of the economy, but we have no particular feeling about it. [Steel (including

cast and wrought products)]

2. Future Business Plans

○ Approximately 60% of firms intend to expand their business in the next one or two

years, a slight increase from the previous year. The reason for expansion given by

about 90% of the companies was “increased sales.” By category, the rates of planned

expansion were high in medical devices; processed food, agricultural or fishery

products; chemical and petroleum products; and transportation equipment.

- The indicated trends for business development in the next one or two years were

60.3% planning to expand, 37.0% planning to remain the same, 2.1% plan

reductions, and 0.6% plan to transfer to a third region or withdraw from the market

(Fig. 8). Categories with notably high indications of expansion plans were medical

devices (87.5%), processed food, agricultural or fishery products (75.0%), chemical

and petroleum products (67.2%), and transportation equipment (cars and

motorcycles) (61.1%).

- Reasons for the expected expansion, in order of frequency (multiple answers

permitted) include “Sales increase” (87.5%), “High growth potential” (40.6%), and

“High receptivity for high-value added products” (21.7%) (Fig. 9). Specific functions

that respondents want to expand were “Sales functions” (53.8%), “Production


(high-value added products)” (52.5%), and “Production (ubiquitous products)”

(33.8%) (Fig. 10). The most selected reasons given for planning reduction, transfer

or withdrawal were “Sales decrease” (64.7%), and “Increase of costs (e.g.,

procurement/labor costs)” (29.4%).

-

<The population growth of 1% annually is greatly attractive>

(Regarding growth and potential in U.S. markets) There are good opportunities in

the rapidly-expanding eco-markets. [Steel (including cast and wrought products)]

We cannot overlook the fact that population is growing by 1% annually. The large

number of Asian immigrants who are likely to enjoy Japanese foods is also

attractive. [Processed food, agricultural or fishery products]

We hear that the U.S. economy is picking up, but Houston is exceptionally good

with the strong energy and chemical industries. [Chemical/Petroleum products]

○ As for the number of local employees in the past one year and the future,

approximately 50% of respondents reported increase, while reporting that the

number of expatriate Japanese employees remains unchanged. Regarding issues

(Headquarters/Japan side) related to the promotion of the localization of

management, many cited “Poor language skills of the Japanese employees (both

locally and in Japan)” and “Difficulty in reducing the number of Japanese

expatriate staff.” For local issues, the difficulty in hiring local personnel for

executive positions was often raised as a concern.

- Measures being implemented to encourage localization of management, in order of

frequency (multiple answers permitted) include “To strengthen system to

train/cultivate local human resources by focusing on localization of corporate

management” (58.1%), “To assign local staff to a general manager/manager position”

(57.6%), and “To encourage mid-level hiring activities to obtain competent local

staff by focusing on localization of corporate management” (49.6%) (Fig. 11).

- On the question of issues faced in promoting management localization, the

indicated issues with headquarters/Japan side were “Inadequate language skills of

Japanese expatriate staff (English and local languages)” (32.6%), and “Difficulty in

reducing the number of Japanese expatriate staff” (32.0%). There were many

comments indicating that the lack of language skills at the head office interferes

with smooth communication with the local offices, making it difficult to reduce the

number of expatriate Japanese employees. Issues on the local side include

“Difficulty in recruiting local candidates for executive positions” (43.8%) and

“Insufficient performance/awareness among local staff” (41.5%) (Fig. 12).


<Improving employee skills through training>

We are working hard on localization. We send local hires to the Japan head office to

help them gain a better sense of the corporate culture, and improve understanding.

[Chemical/Petroleum products]

Our policy is to promote people hired locally and trained within the company to

management positions. The managers used to all be Japanese expatriates, but

moving forward, we want to reduce the number of expatriates, except for the young

trainees. [Rubber goods]

Like the head office, we aim to improve employee skills through training, and to

promote the trained local employees to the positions that always used to go to

Japanese expatriates. [Parts for transportation machines (cars and motorcycles)]

<Considering sales activities and communication with the head office, it is difficult to

reduce the number of expatriate Japanese employees>

There aren’t enough people in top management in Japan who can communicate in

English. [Parts for transportation machines (cars and motorcycles)]

The language skills of people at the Japanese parent company have not reached the

level of being able to communicate smoothly with the local staff. (Strong tendency

for communication to be through the expatriate staff.) [Machines (including molds

and power tools)]

Although it has become harder to obtain visas, it is still hard to reduce the

Japanese expatriate staff. Product and technology development are done in Japan

by the Japanese employees. Since customers want to hear from the engineers

handling the development, we have to bring in expatriate staff who has

development experience. [Chemical/Petroleum products]

Some of the issues with the management skills of the expatriate Japanese

employees are that some of them try to impose the Japanese way of doing things

over here, or we get people who have never managed subordinates in Japan

suddenly put in charge of people here, so they cannot manage local staff properly

due to the lack of experiences. [Chemical/Petroleum products]

<There are differences in the business cultures between the U.S. and Japan, which has

an impact on the hiring of local people as executive level candidates>

It is hard to find local talent with college-level understanding of food processing,

and also have both the communication skills and leadership ability. [Processed food,

agricultural or fishery products]

The difficulty in hiring executive candidates is not about the ability or

compensation, it is the difference between Japanese and U.S. cultures. Since this is


a Japanese-based company, the Japanese approach is expected, but it is hard to

find local talent that can do that. Japanese people reach decisions through stages of

discussions with others, but Americans are generally quite independent, so there

are a lot of people who make their own decisions. Company loyalty is also different.

[Paper and Pulp]

In the U.S., people generally continue to do one kind of work, but as a company, we

would like to develop some all-around players with experience from manufacturing

to management, as in Japan. There are also some issues (language, culture,

economic situation) with communication with the parent company. [Plastic

products]

Group-wide there are policies being made to reduce the number of employees sent

from Japan to minimum. Nevertheless, it is difficult to move forward with

localization. For important posts, those locally hired are either Japanese, or people

who can speak Japanese. [Chemical/Petroleum products]

- Over the past year, 47.6% of the respondents indicated that the number of local

employees had increased. Categories with high rates for this response include

transportation machines (cars and motorcycles) (70.6%), transportation machinery

parts (cars and motorcycles) (55.7%), ceramic, earth or stone products (58.3%), and

steel (including cast and wrought products) (53.8%). There were 42.6% of

respondents indicating no change in this number, and 9.8% indicating a reduction.

With regard to plans for the future for number of local employees, 47.7% said they

planned to increase the number, 44.4% had no changes planned, and 7.9% expect to

decrease (Fig. 13). Categories with notably high rates indicating plans to increase

employees include medical devices, metal products, and general machinery.

- For the Japanese expatriate staff, 67.7% of the companies indicated that there was

no change since last year. For the future as well, 77.0% indicated that no changes

were planned (Fig. 14).

3. Sales and Procurement

○ Approximately 80% of products manufactured in the U.S. were for domestic sales.

More than half of firms intend to continue increasing sales in the U.S. On the other

hand, approximately 60% of respondents expect to expand their sales in Mexico,

although the current sales rate is only 4.9%.

- The percentage of products sold within the U.S. was 79.1%. This was followed by

4.9% in Mexico, 4.8% in Canada, 4.1% in Japan, 1.9% to Central and South America


(excluding Mexico), and 5.3% to other regions (Fig. 15).

- For future sales policy, many respondents indicate expansion in the U.S. (53.6%)

and Mexico (62.2%) (Fig. 16). Many of the firms indicating plans to expand sales in

Mexico were in specific industries, such as rubber products (75%), steel (70.0%),

transportation equipment (cars and motorcycles) (66.7%) and electric/electronic

parts (65.2%). There were also nearly 100 companies (47.3%) planning to expand

sales in Central/South America (excluding Mexico).

○ As the source of raw materials and components, the U.S. came in first with a

procurement rate of 56.5% (Japanese-affiliated companies in the U.S.: 15.5%; U.S.

companies: 38.8%; other foreign affiliated companies in the U.S.: 2.2%), followed by

Japan at 28.2%. The greatest number of respondents, 170 firms, reported that they

expect to further increase procurement from local U.S. industries. There were also

a number of respondents, 42, who indicated an intention to expand procurement

from Mexico.

- For the breakdown of procurement sources for raw materials and components,

56.5% is procured within the U.S. (15.5% from Japanese-affiliated local companies,

38.8% local companies, and 2.2% other foreign-affiliated companies). Other sources

in order of percentage are Japan (28.2%), China (5.1%) and ASEAN (3.8%) (Fig. 17).

- For future procurement policy, the most selected answer was a plan to expand

procurement from local U.S. companies (170 companies, 39.2%), indicating that

there is a higher priority for local U.S. companies than for Japanese-affiliated or

other foreign-affiliated companies in the U.S.. The current rate of procurement

from Mexico is low (1.3%), but 42 companies indicated plans to expand in this area,

particularly parts for transportation machinery (Fig. 18).

4. Management Challenges

○ Regarding general managerial issues, “Recruiting engineers,” “Retention of

workers” and “Recruiting workers for management positions” continue to be the

most selected answers. The main factors cited for increased costs were increases in

employee-related expenses such as “Increasing labor costs including salaries and

bonuses” and “Greater burden of medical insurance costs.” The main reasons given

for slow sales were the same as the previous year, including “Intensified price

competition” and “Excellent competing products.”

- General management issues indicated, in order of frequency (multiple answers

permitted) were “Recruiting engineers” (60.2%), “Retention of workers” (39.0%),


and “Recruiting workers for management positions” (37.8%) (Fig.19). Especially,

Japanese-affiliated companies in southern areas seem to have a difficult time

hiring employees with the needed special skills.

- The factors contributing to rising costs in order of frequency (multiple answers

permitted) were “Increase in labor costs (including salaries and bonuses)”

(74.9%), “Increase in healthcare costs” (57.0%), and “Increase in raw material,

natural resource and commodity prices” (52.5%) (Fig. 20). Particularly in the

Midwest, where unions are strong, many Japanese-affiliated companies

indicated that the rising burden of costs related to employees was an issue.

- Factors attributed to contributing to weaker sales, like the previous year were

“Severity in price competition” (80.8%), “Popular products from competitors”

(57.2%), and “Difficulties in distinguishing our products or ourselves from

competitors” (37.2%) (Fig. 21).

<The inflation rate is rising, so pay raises cannot be avoided>

There are no measures to deal with rising labor costs. It doesn’t cause serious

management problems. However, since there is no mandatory retirement age,

having to continue to raise wages to match the inflation rate can be painful.

[Plastic products]

Since our social and health insurance package has always been very good,

Obamacare (healthcare) has not increased the burden by much. However, as wages

rise along with the continuing inflation, it will be a big burden if the social

insurance fees continue to increase. [Paper and Pulp]

With Obamacare, we plan to address the erosion of what used to be a very good

benefits package by increasing the percentage of the employee burden for

insurance. [Electric or electronic parts]

(Measures to deal with Obamacare) We got estimates from several insurance

companies, and made a contract based on a balance among insurance coverage

rates, employee contributions, and company payment. [Processed food, agricultural

or fishery products]

It has become hard to find workers. For the hiring of full-time employees for a

factory expansion we hired a professional recruiter. There has also been an

increase in existing employees switching jobs to places with better working

conditions. [Chemical/Petroleum products]

<Intensifying competition from Asia. Differentiation from competition through better

performance and service is needed>

The intensification of price rivalry is caused by competition with Asian products.


Chinese and Southeast Asian companies are expanding. Many of these competitors

don’t have large-scale facilities in the U.S., and sell directly to customers over the

phone or on-line. Even with the cost of shipping from Asia, since they have no

overhead costs, they can be very competitive on price. [Electric or electronic parts]

Price competition from Korean products has become particularly intense. We are

working to differentiate ourselves with technology that is superior to that found in

the cheap competitor products, and by offering service that considers customer

needs. [Petroleum/chemical products]

The import system is expected to change next year for a portion of the competing

products from China. So we fear there will be an inflow of lower price products.

[Ceramic, earth or stone products]

There are some competing products from Asia, and there are Asian companies that

have taken some of our market share, but our sales haven’t declined. It’s clear that

the market is segmented by price and performance. [Machines (including molds

and power tools)]

Since the design is done in Japan, the point for achieving differentiation is how to

improve production efficiency in the U.S. Reasons it is hard to raise production

efficiency to the same levels as in Japan are 1) Difficulty hiring engineering talent

for geographical reasons, 2) Facilities are outdated. [Parts for transportation

machines (cars and motorcycles)]

5. Capital Investment

○ Increases in capital investment were most notable among medical device and

transportation equipment makers.

- For the comparison of capital investment between 2013 and 2014, about half

(47.3%) responded that it remained the same, while 40.4% reported an increase,

significantly exceeding the number reporting a decrease (12.3%) (Fig. 22). The

reports of increases over the previous year were particularly high among companies

involved in medical equipment (62.5%) and transportation machines (cars and

motorcycles) (58.8%). The main uses of the capital investments in order of

frequency (multiple answers permitted) were “Modernization and efficiency

improvement of plants (include expanding or renewing of machines and

facilities)” (70.8%), “Expansion of current production facilities” (28.4%), and

“Enhancement of technology and R&D” (20.1%) (Fig. 23).


6. Changing Business Environment

○ Looking at the production rate of goods for the U.S. market by country, U.S.

production was the highest, at about 70%. For future production, many firms

indicated even further expansion of production in the U.S. (187 firms, 36.7%). The

percentage of those planning expansion in Mexico was also high (64.1%). In

comparison, among companies currently using Japan as a production site, about

30% (76 companies) indicated that production would be decreased. The reasons

given for the decisions to change the production system, in descending order of

number of responses, include “Expansion of the U.S. market (supply from new

bases),” “Requests from clients” and “Improvement towards the stable supply of

products (Dispersion of risks).”

○ Utilization rates of FTAs for import/export have risen, compared to those of the

previous year. The FTA utilization rates are particularly high with NAFTA

members like Canada and Mexico. The use of FTA for imports from Korea has also

increased significantly from the previous year.

○ Regarding the influence of the shale revolution, 20.2% of respondents reported that

it was positive, significantly exceeding the 2.6% who stated that it was negative.

Responses that constituted the majority were “We have felt no influence” (32.7%)

and “We do not know” (44.5%). Concrete effects listed in descending order of

number of responses: “Increase of product demands,” “Decrease of fuel costs” and

“Decrease in raw material prices.”

○ The industrial fields for which market expansion is most expected in the next few

years were “Medical,” “Environment,” “Shale gas and Shale oil,” “Health,” and

“Cloud and mobile.” Many respondents listed two states at the top as promising

areas: Texas, where the population growth has been significant, and California,

where Asian and Hispanic residents form nearly half of the entire population.

○ Optimization of production system for sales in the U.S.

- Regarding production rate for sales in the U.S. by country, U.S. marked first at

72.6% (Japan: 14.7%; Mexico: 3.5%; Asia (excluding Japan, China): 3.5%; China:

2.9% and Canada: 1.0% (Fig. 24).

- Future production system

・ The most selected response was that production in the U.S. would be further

expanded (36.7%, 187 companies). Of this group, 123 companies indicated only

expansion in the U.S. (Did not select “decrease” for any other country.) There

were only 30 companies responding that production in the U.S. would be


reduced.

・ Among firms with production bases in Mexico (including those planning such

bases) most indicated that they planned to expand in the future (64.1%, 75

companies).

・ In contrast, among firms with production bases in Japan (including those

planning such bases), more than 30% (76 companies) responded that reductions

were planned (Fig. 25).

・ Among firms with production bases in China and Asia (other than Japan and

China) (including those planning such bases), there were 12.8% planning

reductions in China, and 10.5% planning reductions elsewhere in Asia.

- Combinations of regions with production base expansion (up) and offsetting

reduction (down).

<Regions of “reduction” for the 187 companies indicating “expansion” in the U.S.>

・[U.S. (up)/Japan (down)]: 57 companies（Parts for transportation machines: 15,

Chemical/Petroleum products: 7, General machinery: 5, Electric or electronic

parts: 5, Transportation machines: 3, Rubber goods: 3, etc.）

・[U.S. (up)/Asia (down)]: 5 companies

<Region of “expansion” for the 30 companies indicating “reduction” for the U.S.>

・[Mexico (up)/U.S. (down)]: 13 companies（Parts for transportation machines: 8,

Transportation machines: 2, etc.）

・[Asia (up)/U.S. (down)]: 5 companies（Parts for transportation machines: 2, etc.）

<Other country pair combinations>

・[Mexico (up)/Japan (down)]: 16 companies（Parts for transportation machines: 6,

Transportation machines: 2, Electric or electronic parts: 2, etc.）

・[Asia (up)/Japan (down)]: 15 companies（Parts for transportation machines: 3,

Electric or electronic parts: 2, General machinery: 2, etc.)

・ [China (up)/Japan (down)]: 8 companies (Electric or electronic parts: 3,

Chemical/Petroleum products: 2, etc.)

・[Mexico (up)/China (down)]: 5 companies（Parts for transportation machines: 3,

Electric or electronic parts: 2）

- Reasons for changes to the policy in the future, in order of frequency include,

“Expansion of the U.S. market (with supply of products from new bases)” (61.9%),

“Requests from clients” (39.1%), and “Improvement towards the stable supply of

products (Dispersion of risks)” (29.9%) (Fig. 26).

<One advantage of production in Mexico is the low wages>

The advantage of Mexico is that the wages for employees below the management

level are low. Wages are expected to continue to increase as European and U.S.


companies enter the market. Since there still isn’t mass production (in Mexico), we

don’t have a complete understanding of logistics costs, and we are conscious that

costly distribution may be an issue. [Parts for transportation machines (cars and

motorcycles)]

Some of the U.S. companies that we have as customers have a strong consciousness

to “Buy American” (Not a legal requirement, just an attitude.) For that reason,

there is some advantage to production in the U.S. [Rubber goods]

From the cost perspective, we’d like to move production from the U.S. to another

region, but there are many issues, including how to deal with the current

employees. [Chemical/Petroleum products]

○ Utilization of bilateral or multilateral FTAs

- Since both Canada and Mexico are NAFTA member states, high rates of FTA usage

were reported. For Canada, usage is 46.6% for exports and 48.1% for imports. With

Mexico, the utilization rates are 49.3% for exports and 61.9% for imports. For the

imports from Korea there has been a significant increase in the use of FTAs

compared to the previous year (22.2% in 2013 and 51.0% in 2014) (Fig. 27).

○ Effects of the shale revolution in the U.S.

- With regard to the effects of the shale revolution, 20.2% indicated that the effects

were positive, far exceeding the number indicating a negative effect (2.6%) (Fig. 28).

However, more than half of those responding indicated that there was no effect or

“effect unknown.” Specific effects cited, in order of frequency, included “Increase of

product demands” (49.3%), “Decrease in fuel costs” (39.0%), and “Decrease in raw

material prices” (29.5%) (Fig. 29).

<Increase in demand for products related to shale development. Many voiced the

opinion that they felt no direct benefit in terms of fuel costs>

Since our products are used in products that use petroleum, demand expands as

the petroleum industry grows. [Electric or electronic equipment]

We have heard that benefit from the drop in price of raw materials has been big.

Since most of the ethylene we use as a raw material is derived from natural gas, an

increase in shale gas production is linked to dropping prices.

[Chemical/Petroleum products]

Since transportation costs are not only affected by fuel prices, and a large portion is

due to insurance and labor costs, we haven’t really felt much of a benefit. We are


also not very happy about the fact that gasoline prices have remained higher here

than in surrounding states. [Processed food, agricultural or fishery products]

The demand for our products is increasing. Out pipe is used for pipeline transport.

We can also expect to see a steady maintenance demand. [Machines (including

molds and power tools)]

The benefit of the shale revolution is a drop in gasoline prices. When gas prices

drop, there is a problem with a decline in the sales of hybrid cars, but overall, the

big vehicles like the SUVs are selling, so that may be a factor. [Parts for

transportation machines (cars and motorcycles)]

Since there are large supplies of raw materials in Texas, you would think you could

get them cheaply, but the prices haven’t been decreasing. I think the electricity

prices are competitive compared to neighboring states. One disadvantage is the

high insurance premiums because of the hurricane risk, and labor costs have been

increasing recently. [Chemical/Petroleum products]

○ Areas in which the markets are expected to grow in the next two or three years

<Industry field>

- The U.S. markets expected to experience growth in the next few years selected by

the respondents (up to a maximum of three fields), in order of frequency, were

Medical (48.9%), Environment (46.9%), Shale gas and Shale oil (40.4%), Health

(27.8%), and Cloud and mobile (storage, Big Data, mobile devices, SNS, etc.)

(27.8%) (Fig. 30).

< Growing populations and increasing awareness of health has a positive effect on

industries such as medicine, health, and food>

Interest in the environment is spreading to government-related areas. Shale gas

will not just be for domestic consumption, I think the exports to places like Japan

and Europe will also increase. Recently, the leak of credit card information from

large retail chains has become a big problem, so the need for data security is

growing. [Electric or electronic parts]

The population continues to grow, which supports all industries. I think there will

be wide expansion in fields related to foods and security. [Chemical/Petroleum

products]

With increasing health-awareness, there are large changes in consumer demands.

There are opportunities for products with high functionality and products that use

natural ingredients. [Processed food, agricultural or fishery products]


<Region>

- The regions selected as most likely to grow in the next two to three years were

distributed, with the South (73.8%), West (47.3%), Midwest (41.4%) and Northeast

(32.0%) (Fig. 31). The main types of industry selecting the South were general

machinery and plastic products. The main industries selecting the West include

medical devices, electric or electronic parts, and processed food, agricultural or

fishery products.

- Looking at the selection by state, the respondents indicated Texas (58.5%),

California (36.7%), Ohio (22.7%), New York (19.4%), and Georgia (15.5%) (Fig. 32).

The top two were Texas, where population growth is notable, and California, where

the Asian and Hispanic residents account for nearly half of the total population.

<The most promising states are Texas and California>

Our customers, the high-tech companies (biotech, semiconductors, etc.) are

concentrated in California. The proportion of this kind of company being

established here is higher than on the East Coast. The head office functions cannot

be easily moved, but engineers, etc. are being concentrated on the West Coast.

[Electric or electronic parts]

The semiconductor market is showing signs of growth both in Texas and California.

I frequently make business trips to Texas and can feel the energy of the economy.

Phoenix, Arizona has the same kind of vitality. [Chemical/Petroleum products]

Regions where market growth is expected are 1) The tri-state area including New

York, New Jersey, Connecticut (population growth), 2) California

(environment-related business customers), and 3.) North Dakota (energy-related

customers). [Electric or electronic parts]

With the transfer of major auto makers, we are studying a transfer of our sales

functions, but not production, to Texas. [Parts for transportation machines (cars

and motorcycles)]

From a wage management perspective, in Texas you only have to pay federal taxes;

there is no state or local taxes. It’s also easy to operate factories because the labor

regulations aren’t so restrictive. [Chemical/Petroleum products]


Fig. 1: Changes in year-to-year operating profit as indicated by DI and real U.S. GDP

growth rate

20.0

42.6 42.9

53.0

36.9

42.1

34.4

20.8

21.4 18.2

-10.3

31.4

14.1

27.0

32.9

23.9

-16.6

-41.8

55.7

6.6

29.9

31.7

33.4

44.8

-5

-4

-3

-2

-1

0

1

2

3

4

5

6

-50

-40

-30

-20

-10

0

10

20

30

40

50

60

91 92 93 94 95 96 97 98 99 00 01 02 03 04

*

05 06 07 08 09 10 11 12 13 14 15

U.S. DI Real GDP growth rate

(%)

Note: DI is an abbreviation for diffusion index calculated as the proportion of businesses reporting increased operating profits minus

those reporting decreased operating profits compared to the previous year. It is an indicator of the direction of changes, such as business

confidence. 2014 and 2015 are IMF estimates (announced Oct. 2014.) *There was no survey in 2004.

(DI Value) Real GDP growth rate (over previous year)

•

Respondents: 665 companies


Fig. 2: Year-to-year operating profit changes

49.4

60.3 62.2

68.1

58.2

60.3

56.1

46.5

46.6

42.9

33.8

53.6

44.9 49.3

52.5

47.0

28.1

20.0

67.9

39.2

51.0 50.2 49.8

52.8

21.2

22.0

18.5 16.7

20.5 21.5 22.2

27.8 28.2

32.4

22.1

24.2

28.4 27.9

30.0

27.2

18.2

19.9

28.3

27.9

31.3

33.8

39.2

29.4

17.7 19.3

15.1

21.3

18.2

21.7

25.7 25.2 24.7

44.1

22.2

30.8

22.3 19.6

23.1

44.7

61.8

12.2

32.6

21.1

18.5 16.4

8.0

0

10

20

30

40

50

60

70

91 92 93 94 95 96 97 98 99 00 01 02 03 04

*

05 06 07 08 09 10 11 12 13 14 15

(Estimate)

Increase

Remain the same

Decrease

•

(%)

* There was no survey in 2004. Respondents: 665 companies


Fig. 3: Reasons for increased operating profits forecast for 2014 (Multiple answers)

15.5

81.5

21.2

26.4

14.2

17.9

30.6

8.5

4.2

0% 20% 40% 60% 80% 100%

Sales increase due to export expansion

Sales increase in local markets

Exchange rate fluctuation

Reduction of procurement costs

Reduction of labor costs

Reduction of other expenditures (e.g.,

administrative/utility costs)

Improvement of production efficiency

(manufacturing industry only)

Improvement of sales efficiency

Other Respondents: 330 companies


Fig. 4: Reasons for decreased operating profits forecast for 2014 (Multiple answers)

9.2

45.0

0.9

24.8

34.9

21.1

0.9

21.1

26.6

0% 20% 40% 60%

Sales decrease due to export slowdown

Sales decrease in local markets


Increase of procurement costs

Increase of labor costs

Increase of other expenditures (e.g.,

administrative/utility/fuel costs)

Rising interest rates

Production costs insufficiently reflected in selling

price of goods

Other



Fig. 5: Changes in operating profit and real U.S. GDP growth rate

38.9

51.2

56.8

66.6 67.9 65.5

67.1 66.6

69.7

63.7

59.7

66.2 66.0

75.7

80.9 78.3

61.7

35.5

74.2

67.5

73.3

79.782.3

7.9 7.8 8.6 10.2

7.3

10.2 9.2 8.8

5.8 7.6

11.2 12.4

15.0

14.6 10.5

13.6

21.6

22.214.5

17.315.1

11.89.9

53.2

41.0

34.7

23.2 24.9 24.3 23.6 24.7 24.4

28.8 29.1

21.3 19.0

9.6 8.6 8.0

16.6

42.4

13.715.2

11.6

8.5 7.8

-0.2

3.6

2.7

4.0

2.7

3.8

4.5 4.4 4.7

4.1

1.0

1.8

2.8

3.8

3.3

2.7

1.8

-0.3

-2.8

2.5

1.6

2.3 2.2 2.2

-5

-4

-3

-2

-1

0

1

2

3

4

5

0

10

20

30

40

50

60

70

80

90

100

91 92 93 94 95 96 97 98 99 00 01 02 03 04

*

05 06 07 08 09 10 11 12 13 14

Profit Break-even Loss Real GDP growth rate (left axis)

Profit

Real GDP growth rate (over previous year) (right axis)

Loss

Break-even

(%)(%)

Note: The GDP growth rate for 2014 is the IMF estimate (announced Oct. 2014.) *No survey conducted in 2004.



Fig. 6: Reasons for increased operating profits forecast for 2015 (Multiple answers)

17.8

83.0

11.2

21.3

10.6

15.8

37.1

14.7

6.9

0% 20% 40% 60% 80% 100%

Sales increase due to export expansion

Sales increase in local markets


Reduction of procurement costs

Reduction of labor costs

Reduction of other expenditures (e.g.,

administrative/utility/fuel costs)

Improvement of production efficiency

(manufacturing industry only)

Improvement of sales efficiency



Fig. 7: Reasons for decreased operating profits forecast for 2015 (Multiple answers)

11.3

58.5

7.5

22.6

30.2

11.3

1.9

30.2

15.1

0% 20% 40% 60% 80%

Sales decrease due to export slowdown

Sales decrease in local markets


Increase of procurement costs


Increase of other expenditures (e.g.,

administrative/utility costs)

Rising interest rates

Production costs insufficiently reflected in selling

price of goods



Fig. 8: Business development in the next one or two years

Expansion

60.3%

Remain the same

37.0%

Reduction

2.1%

Withdrawal or transfer

to a 3rd country

(region)

0.6%

Respondents :668 companies


Fig. 9: Reasons for the future business expansion in the next one or two years (Multiple

answers)

87.5

40.6

21.7

12.0

0.0

0.0

14.2

14.2

4.5

0% 20% 40% 60% 80% 100%

Sales increase

High growth and potential

High receptivity for high-value added products

Reduction of costs (e.g., procurement/labor costs)

Deregulation

Ease in securing labor force

Reviewing production and distribution networks

Relationship with clients



Fig. 10: Expanding functions in case of business expansion in the next one or two years

(Multiple answers)

53.8

33.8

52.5

22.3

7.5

9.8

3.5

3.5

0% 20% 40% 60%

Sales function

Production (generic products)

Production (high-value added products)

R&D

Function of regional headquarters

Logistics functions

Administrative functions in providing services

(e.g., shared services, call center)



Fig. 11: Measures to encourage localization of corporate management (Multiple

answers)

58.1

49.6

25.2

35.3

57.6

32.7

20.4

17.9

6.6

7.5

2.7

0% 20% 40% 60% 80%

Strengthen training of local employees with focus on

localization

Encourage mid-career hiring to obtain competent

local staff with focus on localization

Reform of personnel systems (merit-based

promotion, etc.) with focus on localization

Assign local staff to executive positions

Assign local staff to general manager/manager

positions

Strengthen R&D capacity to develop quality of

products/services for local markets

Strengthen authority in local office to allow

decision-making for sales strategies

Delegate authority to local office from headquarters

Obtain human resources/management resources

through M&A

No particular actions



Fig 12: Issues faced in promoting management localization (Multiple answers)

10.0

32.0

7.4

24.0

27.3

32.6

6.9

43.8

16.5

8.7

41.5

14.5

16.1

5.5

15.2

0% 10% 20% 30% 40% 50%

Disagreement over recruitment policy between local office

and headquarters

Difficulty in reducing the number of Japanese expatriate

staff

Shortage of positions available to local staff

Little progress in delegating authority from the headquarters

to local office

Insufficient management capabilities of Japanese expatriate

staff

Inadequate language skills of Japanese expatriate staff

(English and local languages)

Other

Difficulty recruiting local candidates for executive positions

High turnover rate of local candidates for executive

positions

Inadequate language skills of local staff (Japanese and

English)

Insufficient performance/awareness among local staff

Insufficient capabilities for local planning and marketing

Insufficient capabilities to develop local products and

services

Other

No particular issues

Issu

e w

ith t

he

hea

dquar

ters

/Jap

an s

ide

Issu

e w

ith t

he

loca

l si

de



Fig. 13: Changes in the past 1 year and future plans for number of local employees

Fig. 14: Changes in the past 1 year and future plans for number of Japanese expatriate

staff

47.7

47.6

44.4

42.6

7.9

9.8

0% 20% 40% 60% 80% 100%

Local hires

(future plan)

(n=648)

Local hires

(change in past 1 year)

(n=664)

Increase No change Decrease

10.2

18.3

77.0

67.7

12.8

14.0

0% 20% 40% 60% 80% 100%

Japanese expatriates

(future plan)

(n=647)

Japanese expatriates

(change in past 1 year)

(n=662)

Increase No change Decrease


Fig. 15: Breakdown of product sale destinations (By country/region and industry)

77.7

72.3

59.6

68.8

84.1

87.4

68.6

82.2

80.5

83.5

78.3

89.9

84.7

81.8

81.3

81.8

72.0

56.7

96.3

50.0

70.7

75.6

79.1

4.3

6.5

2.6

3.0

7.4

6.7

5.6

3.1

6.0

3.8

1.0

4.0

3.5

5.6

1.3

4.4

3.3

2.0

2.7

4.0

1.6

3.5

4.8

3.7

0.3

1.3

2.5

6.1

2.7

6.4

2.3

5.8

10.2

4.6

2.6

1.1

6.2

0.5

9.9

3.5

0.7

0.7

8.0

2.0

4.9

3.2 1.7

2.5

1.9

0.6

1.3

1.9

3.0

3.1

1.2

0.4

1.1

2.3

3.4

0.8

1.3

2.9

14.3

4.3

1.4

1.9

4.6

0.8

19.0

13.8

0.9 0.1

7.3

4.0

1.8

0.4

5.1

1.0

0.5

1.0

8.0

0.9

5.5

1.3

0.3

1.1

13.5

4.1

6.5

18.3

15.0

9.9

0.9

1.8

10.3

5.4

2.8

0.9

10.6

1.5

7.9

2.1

8.0

1.7

12.8

25.0

46.0

14.3

4.1

5.3

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Other manufacturing (n=49)

Print and publication (n=6)

Medical devices (n=8)

Precision machines (n=23)

Parts for transportation machines (cars and

motorcycles) (n=147)

Transportation machines (cars and motorcycles)

(n=16)

Electric or electronic parts (n=44)

Electric machines or electronics (n=38)

Machines (including molds and power tools) (n=44)

Metal goods (including plated products) (n=34)

Non-ferrous metals (n=14)

Steel (including cast and wrought products) (n=26)

Ceramic, earth or stone (n=12)

Rubber goods (n=14)

Pharmaceuticals (n=6)

Plastic products (n=37)

Chemical/Petroleum products (n=64)

Paper and pulp (n=3)

Furniture and interior goods (n=3)

Timber and wood products (excluding furniture and

interior goods) (n=1)

Clothes and textiles (n=0)

Textiles (yarn, woven and chemical fiber products)

(n=7)

Process food, agricultural or fishery products (n=52)

All (n=648)

U.S. Canada Mexico Central/South America (except Mexico) Japan Other


Fig. 16: Future plans for changes in product procurement destinations (by

country/region)

35.4

12.4

47.3

62.2

26.7

53.6

58.3

78.4

48.8

33.9

70.8

42.5

6.3

9.3

3.9

3.8

2.5

3.9

0% 20% 40% 60% 80% 100%

Other (n=206)

Japan (n=194)

Central/South America (ex. Mexico)

(n=203)

Mexico (n=339)

Canada (n=360)

U.S. (n=593)

Expand No change Decrease


Fig. 17: Breakdown of material/parts procurement sources (By country/region and

industry)

8.7

7.5

6.3

7.6

28.8

19.8

12.7

7.3

9.4

14.7

15.9

15.0

3.2

11.5

3.2

29.8

9.1

5.0

0.3

13.3

8.0

15.5

47.6

31.8

53.8

17.1

32.7

42.7

24.0

19.1

30.6

40.7

53.3

58.3

52.9

35.6

43.7

41.6

45.8

66.7

35.0

15.0

19.6

63.0

38.8

0.8

1.0

1.6

1.3

1.2

1.7

1.7

4.7

3.6

2.7

6.1

3.1

3.5

3.0

18.6

0.7

2.2

1.2

2.0

0.2

1.5

0.6

0.3

0.7

0.2

2.3

0.7

2.4

2.9

85.0

2.0

1.4

0.4

2.9

0.6

0.3

0.5

0.9

0.6

0.8 0.8

0.9

2.9

10.0

1.7

0.5

0.9 1.3

0.2

0.1

0.8 0.7

0.1

0.03

0.4

1.4

0.2

1.7

0.8

0.3

2.4

5.6

4.7

0.7

0.4

2.9

1.4

3.0

2.4

0.2

0.2

2.3 0.7

6.7

0.1

1.2 1.5

3.7

4.4

3.4

2.5

3.4

9.0

10.5

1.1 2.4

6.3

0.7 0.9

16.8

2.5

1.0

1.7

3.3

0.4

5.7

3.8

5.8

0.8

1.3

3.7

3.1

1.0

11.7

15.5

7.1

1.9

1.0

1.6

0.9

2.5

6.2

3.1

5.7

3.3

5.0

8.6

5.5

5.1

1.4

3.8

4.3

1.8

0.2

0.4

0.6

1.7

0.7

1.1

2.9

4.4

1.0

1.5

1.5

3.3

1.7

6.7

0.7

0.5

1.3

27.7

37.3

24.5

60.3

25.6

29.7

36.9

41.4

43.6

31.1

19.5

12.6

37.5

22.6

31.7

12.1

25.5

13.3

46.7

38.7

10.9

28.2

0.4

16.7

0.3

0.1

0.2

0.03

1.3

0.3

0.3

0.04

3.7

1.8

0.7

0.6

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%








(n=16)


Electric machines and electronics (n=37)






Rubber goods (n=14)










(n=7)


All (n=625)

U.S. (local Japan-affiliated company) U.S. (local business) U.S. (other foreign-affiliated company) Canada

Mexico Central/South America (except Mexico) Taiwan, Korea, Hong Kong ASEAN

China EU Japan Other


Fig. 18: Future plans for material/parts procurement sources (by country/region)

7.1

14.8

7.0

28.3

28.9

22.8

17.3

46.7

11.0

13.8

39.2

27.6

90.5

56.4

87.2

62.3

63.2

75.0

80.8

52.2

86.3

83.0

58.8

66.4

2.4

28.8

5.8

9.4

7.9

2.2

1.9

1.1

2.7

3.2

2.1

6.0

0% 20% 40% 60% 80% 100%

Other (n=42)

Japan (n=385)

EU (n=86)

China (n=159)

ASEAN (n=114)

Taiwan, Korea, Hong Kong (n=92)

Central/South America (ex. Mexico)

(n=52)

Mexico (n=90)

Canada (n=73)

U.S. (other foreign-affiliated

company) (n=94)

U.S. (local business) (n=434)

U.S. (local Japan-affiliated

company) (n=283)



Fig. 19: Management Challenges: Management problems in general (Multiple answers)

Fig. 20: Management Challenges: Factors of cost increases (Multiple answers)

Fig. 21: Management Challenges: Factors of weak sales (Multiple answers)

Rank Item Respondents （625) Rate (%)

1 Recruiting engineers 376 60.2

2 Retention of workers 244 39.0

3 Recruiting workers for management positions 236 37.8

4 Recruiting regular workers 219 35.0

5 Safety measures (for automobiles, food, medicines, etc.) 46 7.4

6Assisting Japanese expats (e.g. acquiring driver’s licenses, social

security number, etc.)35 5.6

7 Acquiring work visas for Japanese expats 32 5.1

8 Employment Procedures 23 3.7

9 Labor union related disputes including strikes 17 2.7

10 Antitrust measures 15 2.4

Other 63 10.1

Rank Item Respondents (653) Rate (%)

1 Increase in labor costs (including salaries and bonuses) 489 74.9

2 Increase in health insurance (healthcare) costs 372 57.0

3 Increase in raw material, natural resource and commodity prices 343 52.5

4 Increase in transportation costs (including gasoline) 172 26.3

5 Yen/ dollar exchange risk 149 22.8

6 Increase in fuding costs 61 9.3

7Increase in costs due to tightened regulations on

distribution/logistics56 8.6

8 Legal costs (compliance-related matters) 49 7.5

9 Increase in tax 32 4.9

10 Labor management costs (labor disputes/lawsuits) 24 3.7

11 Visa application costs 4 0.6

Other 17 2.6

Rank Item Respondents (647) Rate (%)

1 Severe price competition 523 80.8

2 Popular products from competitors 370 57.2

3 Difficulty in differentiation from competitors 241 37.2

4 Difficulty expanding sales channels 153 23.6

5 Low awareness of company’s products and technologies 84 13.0

6 Pirated or counterfeit products 39 6.0

7

Strict regulations for government permits and licenses regarding

sales 35 5.4

8

"Buy American"" rules (priority for U.S.-made products for

government procurement) 20 3.1

9

Decrease in sales and disruption of distribution channels due to

natural disasters 10 1.5

Other 15 2.3


Fig. 22: Changes in capital investment in 2014, compared to 2013

Increase from

previous year

40.4%

Remained the same

47.3%

Decrease from

previous year

12.3%

Respondents : 656 companies


Fig. 23: Usage of capital investment in 2014 (Multiple answers)

28.4

70.8

7.4

20.1

7.5

18.3

8.2

0% 20% 40% 60% 80%

Expansion of corrent production facilities

Factory modernization and efficiency

improvement

(includes expanding or renewing of machines

and facilities)

New plant construction

Enhancement of technology and R&D

Environmental measures

(reduction of greenhouse gases, conservation

etc.)

Investment in IT for more efficiency

OtherRespondents: 623 companies


Fig. 24: Production distribution for sales in the U.S. market (By country/region and

industry)

74.2

52.5

65.4

55.6

80.9

81.4

43.7

39.1

57.2

81.6

85.6

86.0

57.6

70.3

80.8

79.5

80.4

66.7

70.0

100.0

80.7

86.8

72.6

2.3

0.3

0.3

1.6

1.5

0.3

0.1

0.8

0.9

0.4

1.1

0.8

1.1

0.7

0.7

1.0

3.1

6.9

[値]

3.7

3.8

1.3

0.9

1.4

4.2

4.1

3.2

12.7

4.8

0.9

7.1

1.8

3.5

0.4

0.5

0.5

0.5

0.8

0.5

0.9

2.1

0.5 0.7

0.6

3.3

0.4

0.5

3.9

0.8

0.7 0.5

1.1

12.1

11.4

3.4

0.03

6.4

2.8

1.5

0.4

2.2

5.0

2.7

2.9

3.2

7.9

2.0

0.6

13.4

16.8

3.0

0.7

5.7

0.9

1.4

4.4

0.2

1.8

0.7

10.0

1.4

0.9

3.5

0.8

1.3

1.9 0.1

0.2

0.4

1.2

0.4

0.2

0.5 0.5

0.3

1.8

2.2

3.3

0.1

0.7

12.0

30.0

24.4

37.6

6.8

14.8

24.7

26.5

33.5

12.9

7.1

6.9

30.1

16.1

3.2

9.9

11.9

15.0

25.0

10.7

6.7

14.7

0.1

16.7

3.7

0.1

1.2

0.3

0.1

2.9

0.4

0.6

1.7

0.7

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%








(n=17)


Electric machines and electronics (n=38)






Rubber goods (n=14)










(n=7)


All (n=635)

U.S. Canada Mexico Central/South America (except Mexico) China Asia (except Japan, China) EU Japan Other


Fig. 25: Future plans for production for sales in the U.S. market (by country/region)

54.5

10.2

20.0

32.4

21.3

29.4

64.1

19.0

36.7

45.5

56.2

67.3

57.1

66.0

68.6

34.2

73.8

57.5

0.0

33.6

12.7

10.5

12.8

2.0

1.7

7.1

5.9

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Other (n=11)

Japan (n=226)

EU (n=55)

Asia (ex. Japan and China) (n=105)

China (n=94)

Central/South America (ex. Mexico) (n=51)

Mexico (n=117)

Canada (n=84)

U.S. (n=510)



Fig. 26: Optimization of production: Reasons for changes in future plans (Multiple

answers)

17.8

18.1

14.6

7.1

21.7

23.1

6.4

61.9

28.8

39.1

4.6

19.2

4.6

3.2

7.8

9.3

29.9

6.0

0% 20% 40% 60% 80%

A1) Decrease of production costs in the U.S.

A2) Increase of labor costs in current location

A3) Increase of material procurement costs in

current location

A4) Increase of quality control costs at current

location

A5) Incraese of production costs

A6) Increase of logistics costs

A7) Other

B1) Expansion of the U.S. market (with supply of

products from new bases)

B2) Necesity to shorten delivery times

B3) Requests from clients

B4) Other

C1) Changes in business environment with FTA,

EPA etc.

C2) Legal system changes

C3) Protection of intellectual property rights

C4) Other

D1) Increase of country risks at current location

D2) Improvement in supply stability (risk

distribution)

D3) Other

Co

st f

acto

rsM

arket

fac

tors

Reg

ula

tio

n f

acto

rsO

ther



Fig. 27: Bilateral/Multilateral FTA utilization

*Central/South America = Chile, El Salvador, Nicaragua, Guatemala, Dominican

Republic, Costa Rica, Panama, Peru, Colombia

*Middle East and North Africa = Israel, Jordan, Morocco, Bahrain, Oman

No. of

valid

responses

Using Studying

use

Not using

(not

planned)

No. of

valid

responses

Using Studying

use

Not using

(not

planned)

Canada 313146

46.6%

41

13.1%

126

40.3%79

38

48.1%

10

12.7%

31

39.2%

Mexico 290143

49.3%

48

16.6%

99

34.1%97

60

61.9%

13

13.4%

24

24.7%

Singapore 417

17.1%

8

19.5%

26

63.4%26

9

34.6%

4

15.4%

13

50.0%

Australia 485

10.4%

9

18.8%

34

70.8%10

1

10.0%

3

30.0%

6

60.0%

Korea 5113

25.5%

9

17.6%

29

56.9%49

25

51.0%

8

16.3%

16

32.7%

Central/South America 14334

23.8%

33

23.1%

76

53.1%28

7

25.0%

6

21.4%

15

53.6%

Middle East and North

Africa34

4

11.8%

5

14.7%

25

73.5%7

1

14.3%

3

42.9%

3

42.9%

For Exports, do you make use of /are you

investigating the use of FTA preferential

tariffs?

For Imports, do you make use of /are you

investigating the use of FTA preferential

tariffs?


Fig. 28: Effect of the U.S. shale revolution on business

Positive

20.2%

Negative

2.6%

No effect

32.7%

Don't know

44.5%

Respondents : 660 companies


Fig. 29: Specific effect of the U.S. shale revolution on business (Multiple answers)

29.5

6.2

39.0

1.4

15.8

4.8

49.3

4.8

2.7

6.2

6.2

4.8

0% 20% 40% 60%

Decrease in raw material prices

Increase of raw material (including crude

oil-related) prices

Decrease of fuel costs

Increase of fuel costs

Decrease of transportation costs

Increase of transportation costs

Increase of product demand

Decrease of product demand

Intensifying sales competition

Competition in recruiting skilled workers


Other Respondents:146 companies


Fig. 30: Industries for which the market is most likely to grow in the next few years

(Max. 3 answers)

48.9

46.9

40.4

27.8

27.8

12.2

10.6

9.6

8.5

5.9

4.7

3.7

3.7

2.4

2.3

2.3

1.3

0.2

0% 20% 40% 60%

Medical

Environment

Shale gas and oil

Health

Cloud and mobile

Biotech

Information security

Transportation/distribution

Robotics/mechatronics

Nanotech

Real estate

Rail, roads, bridges

Agriculture and food processing

Professional business services

Electricity, Water, Gas

Other

Educational services

Accommodation, food, and

entertainment servicesRespondents: 622 companies


Fig. 31: Regions where the market is most likely to grow in the next few years (Multiple

answers)

32.0

41.4

73.8

47.3

0% 20% 40% 60% 80%

Northeast

Midwest

South

WestRespondents: 469 companies


Fig. 32: Regions where the market is most likely to grow in the next few years (Multiple

answers)

Rank State State Responses

1 Texas 196

Parts for transportation machines (cars and motorcycles) 44

Electric machines and electronics 20

Process food, agricultural or fishery products 18

Chemical/Petroleum products 18

2 California 123

Electric or electronic parts 21



3 Ohio 76



Machines (including molds and power tools) 10

4 New York 65




Other manufacturing 7

5 Georgia 52


Plastic products 7


6 Tennessee 51


Steel (including cast and wrought products) 5

Metal goods (including plated products) 5

7 Michigan 50





8 Massachusetts 45



Precision machines 5

Other manufacturing 5

9 Indiana 39





9 North Carolina 39





Note: Top 10 states and Top 3 industries shown

jetro’s 2014 survey on business conditions of japanese ... · [processed food, agricultural or...

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