October Small Business Sentiment Rebounds... "Chuseok Effect Still Below Benchmark"

[Asia Economy Reporter Kim Cheol-hyun] Last month, the Small Business Owners and Traditional Markets' Business Sentiment Index (BSI) rose significantly. This appears to be influenced by the Chuseok holiday peak season and the easing of social distancing measures. However, it is still below the baseline, making it difficult to say that recovery has been achieved.

According to the Small Enterprise and Market Service on the 3rd, the BSI for small business owners in October was 78.0, a sharp increase of 23.1 points from the previous month. This is the highest level in four months since June (82.6). This result comes from a survey conducted by the service from the 18th to the 22nd of last month, targeting 2,400 small business establishments and 1,300 traditional markets. A BSI above 100 indicates economic improvement, while below 100 indicates deterioration.

The small business owners' BSI had previously risen to 88.3 in May, reflecting the effect of the government's emergency disaster relief funds, marking the highest point of the year. Since then, it continued to decline until September due to the resurgence of COVID-19. Small business owners cited seasonal factors (23.8%) as the most common reason for the improved business sentiment in October (multiple responses allowed). This was followed by the easing of social distancing (20.2%) and the subsiding of the epidemic (13.0%). By industry, sports and entertainment-related businesses (42.7 points), restaurants (33.3 points), and personal services (32.7 points) all saw increases compared to the previous month.

Last month, the BSI for traditional markets was 73.3, up 8.2 points from the previous month. Like small business owners, this is the highest level in four months since June (79.2). Traditional markets cited seasonal factors (22.1%) and the easing of social distancing (17.4%) as reasons for economic improvement. By industry, the clothing and footwear BSI rose 32.4 points from the previous month to 76.9. Restaurants (24.1 points) and household goods (22.1 points) also saw significant increases compared to the previous month.

Meanwhile, the November outlook BSI for small business owners was 96.8, up 1.6 points from the previous month, and the November outlook BSI for traditional markets was 99.5, up 6.2 points from the previous month.

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