Two-thirds of Japanese companies face business challenges due to a worker shortage, driven by the nation’s rapidly ageing and shrinking population, according to a Reuters survey. Nearly a third of respondents to the Reuters survey said the labour shortage is worsening, with only 4% reporting improvements and 56% saying the situation is neither getting better nor worse.

The survey was conducted by Nikkei Research for Reuters from 24 December to 10 January. Nikkei Research reached out to 505 companies and 235 responded on condition of anonymity.

The majority of respondents, or 66%, indicated that labour shortfalls were seriously or fairly seriously affecting their businesses, while 32% said the impact was not very serious. Labour shortages in Japan, particularly among non-manufacturers and small firms, are reaching historic levels, the government has said, stoking concerns that this supply-side constraint could stifle economic growth.

It comes as credit research firm Teikoku Databank found that the number of bankruptcies caused by labour shortages in 2024 surged 32% from a year earlier to a record 342 cases. When asked about specific measures to address the labour shortfall in a question that allowed multiple answers, 69% said they were intensifying recruitment activities for new graduates and 59% were implementing such measures as extending retirement ages and re-hiring retired employees.