More than half of companies in Japan are short of workers.

Japan's labor shortage remains a serious problem, with 51% of companies reporting insufficient staffing, according to a recently released survey.

As the labor market continues to tighten, companies have cited worsening labor shortages as one of their biggest concerns that could lead to a slowdown in their operations, with 313 companies shutting down in fiscal 2023 (ending March 31, 2024).

Data compiled by Teikoku Databank showed that among more than 27,000 companies surveyed in April, the most serious labor shortage was in the information technology engineering sector.

More than 70% of companies in the industry said they did not have enough workers. Some said that despite the boom in artificial intelligence (AI) technology, they had to abandon projects due to lack of resources.

The labor crisis in the accommodation service industry such as hotels and motels is also notable amid huge demand from a record number of tourists coming to Japan after the lifting of Covid-19 restrictions.

In terms of part-time workers, the industry most affected is food and beverage, with nearly 75% of companies saying they do not have enough workers.

However, compared to the survey in April last year, the industry has improved significantly, with the report showing that the number of part-time workers has increased by 40% since then.

Businesses are hoping the government will further relax immigration regulations to ease labor market difficulties.

The positive point in Teikoku's report is that the number of companies in the food and hotel industries facing labor shortages has decreased over the past year, although not significantly.

On that basis, Teikoku Databank concluded that if this continues, it is likely that Japan will reverse the labor shortage trend in the coming years,

Since last year's survey, the percentage of companies reporting a shortage of full-time employees has reached 51%, nearing the all-time high of 54% recorded in November 2018.