Yeosu Chamber of Commerce: Yeosu City Manufacturing Companies' Business Outlook for Q2 This Year 'Negative'

56.3% of Responding Companies Suffered Losses from COVID-19

The Most Needed Measure to Minimize COVID-19 Damage Is Financial and Tax Support (37.0%)

[Asia Economy Honam Reporting Headquarters Reporter Lee Hyung-kwon] The Yeosu Chamber of Commerce and Industry (Chairman Park Yong-ha) released the business outlook survey (BSI) forecast for the second quarter of this year targeting 186 manufacturing companies in the region.

According to the Yeosu Chamber's survey results on the 26th, the business outlook index (BSI) for the second quarter of 2020 was measured at '73.2', which is a very negative result as it is lower than the baseline value of 100 for the business sentiment index (indicating that the business sentiment for the next quarter is the same as the previous quarter).

Additionally, when distinguishing between the petrochemical-related sector (77.5) and the general sector (67.7), the outlook for the general sector was found to be more negative.

The Yeosu Chamber pointed out that the reason the general sector's sentiment declined much more sharply than the petrochemical-related sector was likely due to concerns over the prolonged economic recession triggered by COVID-19 and the more significant impact of reduced consumption directly experienced in the real market within the general sector.

On the other hand, the decline in the petrochemical sector's outlook was analyzed to be due to the continued global economic stagnation caused by COVID-19 and other factors, leading to decreased purchasing power in the petrochemical market, a sharp drop in product demand, and losses experienced in business performance.

More specifically, concerns about long-term inventory valuation losses linked to the decline in international oil prices and the reduction in refining margins were identified as major factors darkening the business outlook.

The Yeosu Chamber also investigated the impact of COVID-19 on regional manufacturing in this survey.

In response to the question, "Has your company's management activities been affected by the recent spread of COVID-19?" 56.3% of companies answered "Yes," which was higher than the 43.7% who answered "No."

When asked about difficulties experienced due to COVID-19, responses were sales decline due to domestic demand contraction (30.6%), shortage of quarantine supplies (21.2%), and export decrease (14.1%) in that order.

Regarding the comparison of industrial site damage between COVID-19 and past epidemics (MERS, SARS, etc.), 62.0% of companies responded "Greater," followed by "Similar" (26.8%) and "Less" (11.3%).

Additionally, when asked about the medium- to long-term impacts COVID-19 could have on our society, the responses were widespread social distrust (41.2%), entrenchment of medium- to long-term issues (such as regulatory reforms) (27.2%), value chain diversification (13.2%), and China phobia (12.3%) in that order.

Finally, regarding the most necessary policy tasks to minimize damage caused by COVID-19 and restore economic vitality, responses were financial and tax support (37.0%), suspension of corporate investigations (such as fair trade and tax audits) (23.7%), and diplomatic efforts to resume operations (20.0%) in that order.

A representative from the Yeosu Chamber stated, "The COVID-19 crisis has overshadowed all the positive factors that Yeosu's economy possesses, such as continuous private sector investment and tourism booms," and urged the government, saying, "Until COVID-19 enters a stabilization phase, more concrete and effective policy support is needed to help small business owners and small and medium-sized enterprises recover from their management difficulties."

This content was produced with the assistance of AI translation services.