Japan's Domestic Business Conditions in April 2026 Continue to Deteriorate Significantly, Down 2.8 Points in Two Months; Profit Margins Squeezed by Increased Procurement Costs Due to High Crude Oil Prices
Teikoku Databank's survey for April 2026 shows Japan's Business Confidence DI dropped to 41.5, a 1.4-point decrease from the previous month, marking the second consecutive month of decline. This ongoing deterioration is driven by high crude oil prices, increased procurement costs with delayed price pass-through, and stagnant personal consumption. Nine out of ten industries, including construction and agriculture/forestry/fisheries, experienced worsening conditions, with small businesses falling into the 30s for the first time in 3 years and 8 months.
📋 Article Processing Timeline
- 📰 Published: May 8, 2026 at 23:47
- 🔍 Collected: May 8, 2026 at 15:01
- 🤖 AI Analyzed: May 8, 2026 at 21:11 (6h 9m after Collected)
Teikoku Databank Co., Ltd. conducted and compiled a survey of domestic business trends for April 2026, targeting 23,083 companies (10,538 valid responses, response rate 45.7%), and announced the results as the Business Confidence DI.
## Key Findings of the Survey
Japan's Business Confidence DI for April 2026 decreased by 1.4 points from the previous month to 41.5, deteriorating for the second consecutive month. The domestic economy significantly retreated for two consecutive months due to soaring crude oil prices, increased procurement costs with delayed price pass-through, and sluggish personal consumption. The economy is expected to continue to weaken with downside risks.
Nine industries, including 'Construction' and 'Agriculture, Forestry, and Fisheries,' deteriorated. Following the previous month, the rise in crude oil prices amid intensifying tensions in the Middle East, along with supply constraints of crude oil-derived materials, impacted a wide range of industries, making procurement cost burdens heavy. By company size, all scales deteriorated for the second consecutive month. 'Small Businesses' fell into the 30s for the first time in 3 years and 8 months since August 2022 during the COVID-19 pandemic. By region, all 10 regions deteriorated for the second consecutive month, with 5 regions falling into the 30s.
### Topics of the Month
The purchase unit price DI surged, and the gap with the selling unit price DI also widened, indicating that companies are unable to catch up with price pass-through.
The next announcement date is scheduled for June 3 (Wednesday) at 13:30.
### Call for Participating Companies in TDB Business Trend Survey
This survey is the largest monthly economic survey in Japan, with over 23,000 companies cooperating nationwide.
Companies wishing to cooperate are requested to read the purpose of the survey and enter the necessary information on the registration form.
* Cooperating companies can view the 'Various DI Trend Tables' and 'List of Company Voices' of this survey.
## Trends in April 2026: Significant Decline
The Business Confidence DI for April 2026 decreased by 1.4 points from the previous month to 41.5, deteriorating for the second consecutive month. The domestic economy significantly retreated for two consecutive months due to soaring crude oil prices, increased procurement costs with delayed price pass-through, and sluggish personal consumption.
In April, the rise in fuel and raw material costs due to the Middle East situation worsened corporate earnings environments at a faster pace than the progress of price pass-through. Conditions were severe in industries like construction, where material shortages such as paints were prominent, and an increasing trend of frugality also contributed negatively. On the other hand, financial markets were robust, with stock prices closing above 60,000 yen, sales and production/shipment volumes remained firm, and the employment and wage environment continued to show improvement.
## Outlook: Weakening Trend
Going forward, high crude oil prices will suppress corporate profits, logistics costs, and household burdens, while policy interest rate hikes and rising long-term interest rates will weigh on capital investment. Conversely, if government growth investments and continuous wage increases can support households' real purchasing power, the economy is expected to remain firm. However, rapid yen depreciation, sharp stock price declines, and increased instability in the Middle East situation and Japan-China relations could significantly push down business sentiment.
The economy is expected to continue to weaken with downside risks amid increasing uncertainty.
## Industry-Specific: 9 out of 10 Industries Deteriorated; Burden from Rising Procurement Costs is a Negative Factor
Nine industries, including 'Construction' and 'Agriculture, Forestry, and Fisheries,' deteriorated. Following the previous month, the burden of procurement costs due to soaring crude oil prices amid intensifying tensions in the Middle East was heavy, and supply constraints of crude oil-derived materials also emerged. In addition, many uncertainties about the future, a growing trend of household frugality, and stagnant personal consumption were also negative factors. Furthermore, chronic labor shortages, recruitment difficulties, and personnel cost burdens also contributed negatively.
* **Construction** (42.4)... Down 3.9 points from the previous month. Deteriorated for the second consecutive month. Voices were heard saying, "Due to problems in the Strait of Hormuz, products made from crude oil are delayed, and some civil engineering and construction sites have stopped" (general civil engineering and construction). Shortages and rising prices of materials such as paints, adhesives, and waterproofing materials were negative factors. In addition, increasing transportation costs and higher fuel costs for heavy machinery due to rising fuel prices were also downward pressure factors. Furthermore, the shortage of skilled workers is becoming serious, and a decline in construction capacity is a challenge.
* **Agriculture, Forestry, and Fisheries** (43.0)... Down 1.2 points. Deteriorated for the fifth consecutive month. Voices were heard saying, "The impact on expenses such as material and fuel costs is significant" (vegetable farmers), with increased burdens from fertilizer prices and maintenance costs for facility horticulture. Similarly, soaring fuel costs and materials like fishing nets are also major negative factors for the fisheries industry. Furthermore, the forestry sector also continued to face severe conditions with increased burdens from felling costs and transportation costs.
* **Services** (46.9)... Down 0.9 points. Deteriorated for the second consecutive month. With heavy burdens from labor costs and material costs, 'Restaurants' (down 1.8 points) fell for the first time in 3 months. Although occupancy rates for guest rooms slightly increased, 'Ryokan/Hotels' (down 2.8 points) also significantly deteriorated due to rising costs such as consumables. In addition, 'Medical, Welfare, and Health Hygiene' (down 1.1 points) also faced material issues.
## Key Findings of the Survey
Japan's Business Confidence DI for April 2026 decreased by 1.4 points from the previous month to 41.5, deteriorating for the second consecutive month. The domestic economy significantly retreated for two consecutive months due to soaring crude oil prices, increased procurement costs with delayed price pass-through, and sluggish personal consumption. The economy is expected to continue to weaken with downside risks.
Nine industries, including 'Construction' and 'Agriculture, Forestry, and Fisheries,' deteriorated. Following the previous month, the rise in crude oil prices amid intensifying tensions in the Middle East, along with supply constraints of crude oil-derived materials, impacted a wide range of industries, making procurement cost burdens heavy. By company size, all scales deteriorated for the second consecutive month. 'Small Businesses' fell into the 30s for the first time in 3 years and 8 months since August 2022 during the COVID-19 pandemic. By region, all 10 regions deteriorated for the second consecutive month, with 5 regions falling into the 30s.
### Topics of the Month
The purchase unit price DI surged, and the gap with the selling unit price DI also widened, indicating that companies are unable to catch up with price pass-through.
The next announcement date is scheduled for June 3 (Wednesday) at 13:30.
### Call for Participating Companies in TDB Business Trend Survey
This survey is the largest monthly economic survey in Japan, with over 23,000 companies cooperating nationwide.
Companies wishing to cooperate are requested to read the purpose of the survey and enter the necessary information on the registration form.
* Cooperating companies can view the 'Various DI Trend Tables' and 'List of Company Voices' of this survey.
## Trends in April 2026: Significant Decline
The Business Confidence DI for April 2026 decreased by 1.4 points from the previous month to 41.5, deteriorating for the second consecutive month. The domestic economy significantly retreated for two consecutive months due to soaring crude oil prices, increased procurement costs with delayed price pass-through, and sluggish personal consumption.
In April, the rise in fuel and raw material costs due to the Middle East situation worsened corporate earnings environments at a faster pace than the progress of price pass-through. Conditions were severe in industries like construction, where material shortages such as paints were prominent, and an increasing trend of frugality also contributed negatively. On the other hand, financial markets were robust, with stock prices closing above 60,000 yen, sales and production/shipment volumes remained firm, and the employment and wage environment continued to show improvement.
## Outlook: Weakening Trend
Going forward, high crude oil prices will suppress corporate profits, logistics costs, and household burdens, while policy interest rate hikes and rising long-term interest rates will weigh on capital investment. Conversely, if government growth investments and continuous wage increases can support households' real purchasing power, the economy is expected to remain firm. However, rapid yen depreciation, sharp stock price declines, and increased instability in the Middle East situation and Japan-China relations could significantly push down business sentiment.
The economy is expected to continue to weaken with downside risks amid increasing uncertainty.
## Industry-Specific: 9 out of 10 Industries Deteriorated; Burden from Rising Procurement Costs is a Negative Factor
Nine industries, including 'Construction' and 'Agriculture, Forestry, and Fisheries,' deteriorated. Following the previous month, the burden of procurement costs due to soaring crude oil prices amid intensifying tensions in the Middle East was heavy, and supply constraints of crude oil-derived materials also emerged. In addition, many uncertainties about the future, a growing trend of household frugality, and stagnant personal consumption were also negative factors. Furthermore, chronic labor shortages, recruitment difficulties, and personnel cost burdens also contributed negatively.
* **Construction** (42.4)... Down 3.9 points from the previous month. Deteriorated for the second consecutive month. Voices were heard saying, "Due to problems in the Strait of Hormuz, products made from crude oil are delayed, and some civil engineering and construction sites have stopped" (general civil engineering and construction). Shortages and rising prices of materials such as paints, adhesives, and waterproofing materials were negative factors. In addition, increasing transportation costs and higher fuel costs for heavy machinery due to rising fuel prices were also downward pressure factors. Furthermore, the shortage of skilled workers is becoming serious, and a decline in construction capacity is a challenge.
* **Agriculture, Forestry, and Fisheries** (43.0)... Down 1.2 points. Deteriorated for the fifth consecutive month. Voices were heard saying, "The impact on expenses such as material and fuel costs is significant" (vegetable farmers), with increased burdens from fertilizer prices and maintenance costs for facility horticulture. Similarly, soaring fuel costs and materials like fishing nets are also major negative factors for the fisheries industry. Furthermore, the forestry sector also continued to face severe conditions with increased burdens from felling costs and transportation costs.
* **Services** (46.9)... Down 0.9 points. Deteriorated for the second consecutive month. With heavy burdens from labor costs and material costs, 'Restaurants' (down 1.8 points) fell for the first time in 3 months. Although occupancy rates for guest rooms slightly increased, 'Ryokan/Hotels' (down 2.8 points) also significantly deteriorated due to rising costs such as consumables. In addition, 'Medical, Welfare, and Health Hygiene' (down 1.1 points) also faced material issues.