News & Updates

FY2024 JETRO Survey on Business Conditions for Japanese Companies Operating Overseas (North America)

Jan 29, 2025

Overview of FY2024 Survey

  • In September 2024, JETRO has conducted an online survey on the state of Japanese companies operating in the U.S. and Canada (those that are at least 10% owned by a Japanese parent, directly or indirectly, and branches of Japanese firms in the U.S. and Canada). 774 responses (694 in the U.S., 80 in Canada) received from 1,826 survey sent (1,649 in the U.S., 177 in Canada, response rate 42.4%).
  • This survey is conducted once a year to ascertain the management situation and changes in the local business environment of Japanese companies operating in the U.S. and Canada. This is the 43rd annual survey for the U.S. and the 35th for Canada. Branch offices of Japanese companies were added to the scope of survey this time.
  • Topics: 1. Operating Profit Forecast, 2. Management Challenges and Countermeasures, 3. Changes in the Competitive Environment, 4.Wages, 5. Reviewing of Supply Chains (Procurement, Production), 6. Future Business Direction, 7. Federal Government Policies (U.S. only)

Survey Results Summary

1. The percentage of companies forecasting profits has returned to pre-COVID levels, exceeding last year’s figures.
For FY2024, 66.2% of Japanese companies in the U.S. and 73.8% in Canada expect to turn a profit. The figure for the U.S. is the first to slightly exceed 2019’s pre-pandemic level.
Around 50% of companies in both the U.S. and Canada plan to expand their business operations over the next few years– a level that has recently remained stable, reflecting anticipated growth in local market demands. For the U.S., companies are planning to expand in economic hubs such as California and Texas as well as in states across the Midwest and Southeast regions.
2. Amidst the increasingly competitive environment, some companies are increasing their market shares.
Approximately 30% of Japanese companies operating in the U.S. and Canada said that the number of competitors has increased compared to five years ago. Despite these circumstances, 36.2% in the U.S. and 48.1% in Canada have increased the market shares of their main products and services.
In the U.S., cost competitiveness is the greatest competitive challenge (59.6%). About 40% of companies are addressing it by developing products/services, strengthening sales/public relations, and reducing costs. The top concern in Canada is brand and name recognition, with strengthening sales and public relations cited as the top countermeasure.
3. Employment and labor challenges remain, including wage increases and labor shortages.
In both the U.S. and Canada, rising employee wage levels is the highest-ranked management challenge. The most common countermeasure is to increase wages for existing employees, highlighting that inflation-driven increases in labor costs are causing concerns to Japanese companies in North America.
4. The trend toward domestic procurement is accelerating as more companies switch to local suppliers.
Regarding changes in procurement sources, Japanese companies in both the U.S. and Canada are primarily shifting to domestic procurement, indicating that supply chain localization is accelerating. In the U.S., the second most notable pattern was companies continuing to redirect their procurement from China to ASEAN countries, as in the previous year. Meanwhile, the number of companies switching to Mexico has decreased to 10 from 21 in the previous year.

FY2024 JETRO Survey on Business Conditions for Japanese Companies Operating Overseas (North America) PDFfile(1.3MB)

Japan External Trade Organization (JETRO)
Americas Division, Research & Analysis Department (Representatives: Hiroya Tanimoto, Hiroyuki Kaino, Shinichi Isobe, Misako Ito)
Tel: +81-3-3582-5545