Survey: 84% Of Smaller Firms Yet To Pass On Higher Costs
A new survey indicates that small and medium-sized firms in Japan are struggling to pass on higher costs to customers. Most said they have not yet been able to raise prices to reflect soaring raw materials costs amid the weakening yen.
Tokyo-based credit union Johnan Shinkin Bank surveyed 670 smaller firms last month. Eighty-four percent of the companies said they have not been able to raise prices to cover all of the higher costs, or any of them.
Only 8.8 percent said they have hiked prices to completely account for the higher cost of materials.
Kawamoto Kyoji, the president of Johnan Shinkin Bank, said their customers are struggling to figure out how to secure profits. He said that they are "using a nationwide network to introduce new suppliers to see if there are other places where those firms can buy materials at lower costs."
10.8 percent of the firms said the weak yen had a serious adverse impact on profits, while 42.8 percent said it had some adverse effect.