December 2022
Survey of Corporate Trends regarding Return to Domestic Sourcing and Manufacturing
One in 4 companies is returning to domestic sourcing and manufacturing Biggest reason is difficulty of procurement owing to supply chain-disruption
— Production capacity and cost competitiveness in Japan are issues —
Introduction
Against the background of the spread of COVID-19 and rising geopolitical risk, difficulty in procuring raw materials and products from overseas and soaring prices are continuing.
Amidst this situation, a movement toward returning production points and supply sources to Japan is occurring among some companies, along with a switch toward domestic products.
Accordingly, Teikoku Databank conducted a corporate survey on the return of domestic sourcing and manufacturing to Japan. The survey was conducted along with the December 2022 TDB survey of economic trends.
*Survey period: December 16, 2022 – January 5, 2023; companies surveyed: 27,163 companies nationwide; Valid responses: 11,680 (Response rate 43.0%).
*Details of this survey can be found on the dedicated Economic Trend Survey website (https://www.tdb-di.com).
Primary points of survey results(summary)
- 1 While 30.0% of companies responded that they “procure from overseas and use imported items”, 46.7% responded that they “do not procure from overseas or use imported items”, and 23.2% responded that they “do not know”.
- 2 Among companies that procure from overseas or use imported items, 40.0% indicated that they are “implementing or considering measures” such as switching to domestic bases or supply sources, transferring them to third countries, or switching to domestic products, etc. In particular, the percentages were high in the areas of “construction”, “fibers, fiber products”, and “clothing accessories wholesaling”.
Among companies that procure from overseas, about one in four indicated that they have “returned to domestic sourcing or switched to domestic products”. - 3 The top reason for implementing or considering these measures was “stable procurement” (52.7%), followed by “increase in import costs due to depreciation of the yen” (44.6%).
- 4 As the reason for not considering such measures, nearly half (48.9%) indicated that “stable procurement is continuing”, followed by 34.1%, who said, “It is cheaper to procure from overseas or use imported products”.