Changes in the Business Conditions of Small- and Medium-Sized Enterprises During COVID-19: Industry and Regional Analysis in Japan

The purpose of this study is to go over SME businesses’ conditions during the COVID-19 pandemic and prepare for the next disaster. We use the “Survey of SME Business Conditions” provided by SME Support Japan, which covers most (more than 80%) small and microbusinesses in Japan. It has a high response rate and a long history. We analyze the business confidence of SMEs during the pandemic by calculating the Diffusion Index (hereafter DI) of business conditions using “Business Conditions (Own Company) Current Period Level.” Business Confidence Index (BCI)-DI is calculated by subtracting the proportion of the number of companies that responded that business conditions were bad from the proportion of companies that responded that the business conditions were good in the quarter under consideration.