Okinawan companies increase profits for a record seventh period in a row

Okinawan companies increase profits for a record seventh period in a row

The index numbers of "Business Condition Weather."


January 17, 2014 Ryukyu Shimpo

On January 16, the Okinawa Development Finance Corporation announced the results of a business conditions survey on the period from October to December 2014 in Okinawa. The diffusion index of business sentiment (DI) in this period increased over the same period the previous year. It demonstrates that Okinawan companies have increased their profits for the seventh period in a row for the first time. The number for “Business Condition Weather” which is a figure based on each DI registered business’s earnings, the break-even level, and cash management during the period was “fine.” The `weather` index number increased to 10.2. The Business Condition Weather has been fine for the seventh period in a row, setting a new record. A representative of the corporation said, “Generally speaking Okinawan companies have been increasing their profits despite labor shortages and high production costs.”

In the breakdown of DI numbers by business type, the number for the manufacturing industry went up by 18.7 percent. The figure for ceramic products was up because a “reactionary decrease phenomenon,” which occurred after the consumption tax hike led to rush demand, disappeared. Due to healthy demand for tourism, the number of restaurant and lodging businesses increased to 37.5, remaining high. The high demand for tourism has had an impact on wholesale and retail businesses. These numbers were all up to 7. Meanwhile, the figures for Information and Telecommunications Industry and hospitality industry have decreased due to a labor shortage. The figures for construction business and transportation business have seen its growth rate declined.

The DI figure for employment conditions, which indicates deficiency or excess of manpower, shows a serious manpower deficiency. The number increased to 31.3, setting a new record.

In particular, the number for the transport industry was up to 51.5. The demand for tourist buses has grown and the construction of a second runway at the Naha Airport has fully started. A lack of drivers in the travel industry and cargo industry has become serious.

Despite labor shortages and high cost of production for raw materials, the DI numbers are expected to continue increasing.

The corporation carried out the survey during the period from the middle of December 2014 to the beginning of January 2015. It targeted companies which have more than 10 million yen in capital, and over 20 employees. Out of 367 companies, the corporation got answers from 345 (94 percent of response rate).

(English translation by T&CT)

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