[Saitama Prefecture] Results of the Saitama Prefecture Quarterly Business Trend Survey (January-March 2026) and Announcement of the "Saitama Prefecture Quarterly Business Trend Survey Data Site"

1. About the Saitama Prefecture Quarterly Business Trend Survey (January-March 2026)

Saitama Prefecture conducts a quarterly business trend survey of 2,200 small and medium-sized enterprises (SMEs) in the prefecture. The results for the January-March 2026 period (survey date: March 1, 2026) have now been compiled.

In addition to the regular survey on topics like business sentiment, this quarter also investigated "price pass-through" and "the status of DX initiatives."

<Points from the Regular Survey Results>

Business Sentiment of SMEs in the Prefecture "Business sentiment among SMEs in the prefecture shows signs of picking up." "The outlook shows signs of improvement."

- The business sentiment DI* for all industries was -37.6, a decrease of 0.4 points from the previous quarter, worsening for the first time in three quarters. - In the manufacturing industry, the DI was -39.5, a decrease of 1.7 points from the previous quarter, worsening for the first time in three quarters. - In the non-manufacturing industry, the DI was -36.2, an increase of 0.6 points from the previous quarter, improving for the third consecutive quarter. - The sales DI and cash flow DI for all industries worsened for the first time in two quarters, and the profitability DI worsened for the first time in four quarters. The capital investment implementation rate also decreased for the first time in four quarters. - The business sentiment outlook DI for the next quarter (April-June 2026) is -12.7, an increase of 6.0 points from the previous quarter, improving for the first time in two quarters.

* An index calculated by subtracting the percentage of companies responding "unfavorable" from the percentage of companies responding "favorable" about the business conditions in their industry.

<Points from the Special Survey Results>

- Regarding price pass-through, the percentage of companies that responded they "are able to sufficiently negotiate (consult on) prices with ordering companies" was 57.5%, an increase of 2.9 points from the previous survey. - On the other hand, the percentage of companies that responded they "are not able to do so sufficiently" was 26.9%, a decrease of 1.8 points from the previous survey. - Regarding challenges in implementing DX, "Lack of personnel to lead DX" (40.0%) was the most common response, followed by "Lack of financial resources" (37.8%) and "Don't know what to do or how to proceed" (24.7%). - Regarding the support expected from the prefecture for DX initiatives, "Financial support and subsidies" (40.2%) was the most common, followed by "Human resource development and supply" (18.5%) and "Enhancement of consultation services" (17.5%).

<Survey Overview>

Survey Method: Written questionnaire survey, and hearing surveys with industry groups and individual companies. Survey Period: January-March 2026 (Survey date: March 1, 2026) Surveyed Industries and Number of Respondents