Textile Products Industry and Accommodation & Food Services Suffer the Most Severe 'COVID' Impact

Korea Federation of SMEs Announces Results of 'COVID-19 Impact Survey on SMEs by Industry'

Impact (%) Due to the Spread of COVID-19

[Asia Economy Reporter Kim Cheol-hyun] The textile products industry and the accommodation and food service industry have been found to suffer the most severe damage due to the novel coronavirus infection (COVID-19).

On the 10th, the Korea Federation of SMEs (Chairman Kim Ki-moon) announced the results of the 'COVID-19 Related Damage Survey by Industry for SMEs,' conducted from April 10 to 23 on 1,234 small and medium enterprises (587 manufacturing, 647 non-manufacturing). The survey revealed that 76.2% of SMEs reported damage, with the manufacturing sector's 'textile products industry (100.0%)' and the non-manufacturing sector's 'accommodation and food service industry (100.0%)' suffering the most severe impact.

The biggest damage cases cited by both manufacturing and non-manufacturing sectors were 'sales decline due to domestic demand contraction' and 'lack of operating funds and financial pressure.' In manufacturing, the responses were ▲sales decline due to domestic demand contraction (81.2%) ▲lack of operating funds and financial pressure (37.3%) ▲cancellation of contract volumes (including export volumes) (19.4%) in order. In non-manufacturing, the order was ▲sales decline due to domestic demand contraction (81.4%) ▲lack of operating funds and financial pressure (52.5%) ▲burden of commercial rent (7.3%) and so on.

The most needed support measures for SMEs were ▲reduction of SME income tax and corporate tax rates (67.6%) as the highest, followed by ▲expansion of increased employment retention subsidies (51.8%), ▲establishment of exemption measures for financial institutions to encourage bold lending (41.9%), and ▲expansion of special employment support industries (22.5%).

The government support measures recognized by SMEs were ▲the Ministry of Employment and Labor's employment retention subsidy (70.4%) as the most cited, followed by ▲secondary loan interest subsidy loans from commercial and local banks (52.2%), and ▲the Industrial Bank of Korea's ultra-low interest special loans for small business owners (52.1%). In manufacturing, the order was the Ministry of Employment and Labor's employment retention subsidy, the Industrial Bank of Korea's ultra-low interest special loans for small business owners, and secondary loan interest subsidy loans from commercial and local banks. In non-manufacturing, the order was the Ministry of Employment and Labor's employment retention subsidy, secondary loan interest subsidy loans from commercial and local banks, and the Industrial Bank of Korea's ultra-low interest special loans for small business owners.

Choo Moon-gap, head of the Economic Policy Headquarters at the Korea Federation of SMEs, said, "The government has introduced groundbreaking policies such as lowering loan interest rates, unified execution of guarantees and loan services by policy fund handling banks, and expansion of employment retention subsidies to support affected companies, but many SMEs still do not know about or feel the effects of these support measures," adding, "there is a need to prepare promotional measures so that detailed support for industry-specific difficulties and government support measures can be effectively utilized in the field by companies."

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