Average Operating Rate of Small and Medium Manufacturing Industries at 66.2% in May... Lowest Since Global Financial Crisis

Average Operating Rate Trend of Small and Medium Manufacturing Enterprises. Source=Korea Federation of SMEs

[Asia Economy Reporter Moon Hyewon] The average operating rate of domestic small and medium-sized manufacturing enterprises has fallen to the lowest level since the global financial crisis.

According to the "July 2020 Small and Medium Enterprise Business Outlook Survey" released by the Korea Federation of SMEs on the 29th, the average operating rate of small and medium manufacturing enterprises in May this year was 66.2%, the lowest level since March 2009 (65.5%) right after the global financial crisis. This figure represents a decrease of 0.6 percentage points from the previous month and 7.8 percentage points compared to the same month last year. The average operating rate refers to the average production ratio of the monthly production capacity of owned production facilities for the given month.

By company size, small enterprises (based on sales of 8 billion to 12 billion KRW) rose by 0.2 percentage points from the previous month to 63.9%, while medium enterprises (12 billion to 80 billion KRW) fell by 1.6 percentage points to 68.3%.

By industry, automobiles and trailers decreased the most by 4.6 percentage points, followed by wood and lumber (3.4 percentage points decrease), and primary metal processing (2.8 percentage points decrease).

However, the beverage, food, and textile industries showed slight increases.

During the same period, by company type, general manufacturing fell by 0.6 percentage points to 65.3%, and innovative manufacturing fell by 1.4 percentage points to 68.2%.

Due to the prolonged COVID-19 pandemic, concerns about future economic recovery were also significant.

The July Business Outlook Index (SBHI) was 68.0, down 14.0 percentage points from the same month last year.

In particular, the manufacturing sector's July business outlook was 67.7, down 16.2 percentage points from the same month last year, while the non-manufacturing sector was 68.1, down 12.8 percentage points.

In June, the main difficulties faced by small and medium enterprises were domestic demand slump (74.4%), followed by excessive competition among companies (37.4%), rising labor costs (35.0%), and delayed collection of sales proceeds (22.3%).

Meanwhile, this survey was conducted from the 15th to the 22nd of last month, targeting 3,150 small and medium enterprises.

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