Labor-saving stocks that grow
with Japan's worker shortage.

According to Teikoku Databank, 225 companies went bankrupt because of labor shortages in April–September 2026, a first-half record for the fourth year in a row. Construction had the most, with 70, followed by services with 63.

Orders for machines that replace workers are rising too. The Japan Robot Association says industrial robot orders in July–September were ¥325.4 billion, up 46.6% from a year earlier and a quarterly record. Much of the growth, however, came from electronic component mounters, and demand from chipmakers is large.

The government also helps small companies pay for labor-saving equipment through the SME Labor-Saving Investment Subsidy. Rheon Automatic Machinery, which makes bread and confectionery forming machines, wrote in its annual report that its products were registered for the subsidy and that subsidized equipment orders increased.

Listed companies that name labor shortages as a risk in their annual reports rose eightfold in nine years, to 184 (Katana's series "Japan Through Annual Reports"). Of these, 19 describe the shortage as a business opportunity for themselves.

• Source：Labor-shortage bankruptcies, first half of FY2026 (Teikoku Databank, October 7, 2026, in Japanese)
• Source：Statistics press release, July–September 2026 (Japan Robot Association, October 22, 2026, in Japanese)
• Source：Robot orders up 46.6% to ¥325.4 billion in July–September (Nihon Butsuryu Shimbun, October 23, 2026, in Japanese)
• Source：SME Labor-Saving Investment Subsidy (Organization for Small & Medium Enterprises and Regional Innovation, in Japanese)
• Source：Listed companies naming labor shortages as a risk (Katana, Japan Through Annual Reports)

Labor-saving equipment pays for itself through the wages it saves. The harder it is to hire and the higher wages go, the sooner it pays back and the stronger the reason to buy. It works the same way as energy-saving equipment when oil is expensive.

Labor shortages do not ease easily even when the economy cools, because the working-age population itself is shrinking. If so, orders at companies that sell ways to need fewer workers should follow the labor shortage more than the business cycle.

So we used Katana to find companies whose core business is cutting the labor their customers need, and whose annual reports say that labor shortages increase demand for it.

Of the 18 companies, we sorted the 7 whose operating profit grew at least 10% a year by forward PER as of October 30, highest first. Growth is the annual rate of operating profit from annual reports (three years; * two years for recently listed companies). PER (times) uses the October 30 share price and each company's forecast profit for this year.

Apart from VRAIN, the software companies trade at 12–16 times. The machine makers stand out. Seibu Electric, JRC and Rheon are growing operating profit about 20% a year, close to VRAIN's pace, yet their PERs are 9–13 times, less than a third of VRAIN's.

AI companies are priced on expectations, and those prices swing widely. Hutzper, which automates factory visual inspection with AI, had a PER of 36 times at its fiscal year-end share price; after its shares fell, it is now 19 times.

Machine makers trade low because they are seen as cyclical. Indeed, even SMC, a leader in factory automation equipment, saw operating profit fall 10% a year over the last three years.

But labor shortages do not ease when the economy cools. Labor-shortage bankruptcies hit a record for the fourth year in a row, and Rheon and CTS write that the government's labor-saving subsidy brought more orders. If orders for machines that replace workers follow the labor shortage more than the economy, then today's prices for machine makers reflect the business cycle, not the profits they are growing.

Machine makers trade at low PERs because equipment orders stop when the economy slows. So are there companies here whose sales are likely to hold up in a downturn? Through Katana MCP, we asked the 18 companies one more question: does the annual report say that a substantial part of revenue is recurring, such as monthly fees or maintenance and replacement parts for installed equipment?

10 were supported. Most were software companies sold on monthly fees; among machine makers, only JRC was supported. For the 7 companies in the table above, we list the recurring share of revenue and the operating margin in the worst of the last seven years, which include the pandemic years. A dash means it could not be confirmed in the annual report or there are not seven years of figures.

At Logizard, warehouse cloud fees are 78% of revenue, and even in its worst year of the seven its operating margin was 14%. JRC describes its conveyor business, 74% of revenue, as a "stable recurring business" built on replacing conveyor parts. Both trade at about 12 times earnings and are growing operating profit 16–24% a year.

For Rheon, recurring revenue could not be confirmed in its annual report. In its worst year, its operating margin fell to 4% and operating profit was about a fifth of its best year. Its low PER of 9.6 reflects that swing. General Packer could not be confirmed either, but its margin stayed near 10% even in its worst year, likely because its customers are food and household goods factories whose production rarely stops in a downturn.

Note that for GENOVA and Liberaware, two of the 10 supported, the evidence is the share of sales from returning customers, not monthly fees. sinops is growing fast, which makes its worst-year margin look low.

If you only look for companies that grow with labor shortages, machine makers and software companies line up side by side. Ask how their revenue comes in, and the cheap companies split into those likely to keep earning when the economy slows and those that are not.