Two-thirds of Japanese companies report business challenges due to labour shortages, as Japan’s population continues to shrink and age, according to a survey conducted by Nikkei Research.
The issue is particularly evident among non-manufacturers and small firms, raising concerns about economic growth.
The survey found that 66% of companies said labour shortages were affecting their operations, while 32% said the impact was minor. Nearly a third of respondents noted that the issue is worsening, with only 4% reporting improvements.
To address the issue, 69% of companies are increasing recruitment efforts for new graduates, and 59% are extending retirement ages or rehiring retired employees. While the official retirement age is 60 for most firms, many allow employees to continue working until 65.
For 2025, 69% of companies identified capital investments as a priority, and 63% highlighted wage increases and other human resource measures.
Labour shortages are also influencing pricing strategies, with 44% of companies planning to increase prices due to higher wages, transportation, and material costs. Meanwhile, 17% plan to maintain current prices, and 26% intend to adjust prices selectively.
Tokyo’s core consumer price index rose 2.4% in December, up from 2.2% in November, adding to expectations of a potential interest rate adjustment.
