Yeosu Chamber of Commerce: Yeosu City Manufacturing Companies Forecast 'Very Negative' Business Conditions for Q4 This Year

Record Lowest (44.1) in Q4 This Year Amid Concerns of COVID-19 Resurgence
Emergency Management Maintained Since COVID-19 Spread (41.2% Respondents)
Cost Reduction and Production Rate Adjustment as Measures Against COVID-19 Resurgence

[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 4th quarter of this year targeting 186 manufacturing companies in the region. (Response rate 36.5%)

According to the survey results, the business sentiment index (BSI) for the 4th quarter of this year recorded '44.1'. This is a figure lower than the baseline value of 100 for the business sentiment index (which means the business sentiment is the same compared to the previous quarter), indicating a "very negative" result, and it is the first time that the Yeosu area survey has recorded below 50.

The Yeosu Chamber explained that in the 4th quarter, the demand for petrochemical products, which are the base industries of our region, continues to decline, and the uncertainty of economic recovery indicators due to consumption contraction is also increasing. In addition, with the escalation of social distancing measures, the degree of decline in sentiment has significantly deepened.

This business outlook survey also investigated the impact of the COVID-19 resurgence on corporate management activities.

The manufacturing companies that responded to this survey forecast that South Korea's economic growth rate this year will fall to a negative level (-2.0% to -1.5%), close to the OECD's projection of -2.0% in case of a second wave outbreak. ※ Government forecast: +0.1% (June), OECD forecast: -0.8%, -2.0% (in case of second wave outbreak)

Also, in response to the question, "Do you expect your company's performance (operating profit) this year to achieve the target set at the beginning of the year?" the majority expected difficulty in achieving the target with responses of "Below target (66.2%)" > "Achieving or close to target (32.4%)" > "Exceeding target (1.5%)."

To the question, "Given the high concerns about the COVID-19 resurgence, is your company currently maintaining normal operations?" the responses were "Maintaining emergency management since the beginning of the year (41.2%)" > "Maintaining normal operations as usual (36.8%)" > "Switching to emergency management due to signs of resurgence (planned) (22.1%)", indicating that emergency management has been maintained since COVID-19 became a social issue.

Regarding the question, "How do you expect your company to respond if the COVID-19 resurgence leads to a prolonged situation?" (multiple responses allowed), the answers were "Cost reduction (39.5%)" > "Reduction in production and operating rates (28.1%)" > "Securing cash liquidity (17.5%)" > "Discovering new businesses or restructuring business (14.9%)", showing that in emergency management, cost reduction and adjustment of production operating rates are prioritized response measures.

After COVID-19, to the question, "What policy tasks must be pursued simultaneously for the successful implementation of the Korean New Deal?" the responses were "Innovation of outdated laws and systems (27.8%)" > "Ensuring continuity of the policy (24.1%)" > "Support for diversification of work types (20.3%)" > "Financial and R&D support for individual companies (19.5%)" > "Training manpower in advanced industrial fields (8.3%)", highlighting institutional innovation and ensuring continuity of innovative policies tailored to overcoming COVID-19.

A Yeosu Chamber official said, "Economic recovery is greatly influenced by the progress of the pandemic and the success of government control policies," adding, "Through this survey, it was confirmed that manufacturing companies in the Yeosu region have accepted the negative business indicators for this year as a given."

He continued, "The decline in marketability and employment shocks have lowered expectations for performance recovery, making the economic outlook very uncertain," and emphasized, "It is urgent to prepare effective economic normalization measures that industries and small business owners can feel."

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