Half of 10 SMEs Expect "Next Year's Export Outlook Similar to This Year"

Korea Federation of SMEs Announces Results of '2021 SME Export Outlook and Policy Tasks Survey'

[Asia Economy Reporter Kim Cheol-hyun] Five out of ten small and medium-sized enterprises (SMEs) expect their export outlook for next year to be similar to this year. The Korea Federation of SMEs (Chairman Kim Ki-moon) announced the results of the "2021 SME Export Outlook and Policy Tasks" survey on the 23rd, which included this information.

The survey, conducted from December 10 to 17 targeting 500 export SMEs nationwide, found that 49.0% of SMEs responded that their export outlook for next year would be similar to this year. Those who expected a worse outlook accounted for 41.4%, while 9.6% anticipated an improvement.

The reasons for a pessimistic export outlook (multiple responses allowed) were led by "global economic recession due to COVID-19 (97.1%)," followed by "strengthening of non-tariff barriers and protectionism by various countries (25.1%)," "logistics difficulties such as soaring maritime freight rates and reduced shipping operations (23.2%)," and "exchange rate decline (13.0%)."

Reasons cited for a positive export outlook included "resolution of uncertainties such as COVID-19 vaccine and treatment development (60.4%)," "securing product competitiveness (50.0%)," "strengthening global cooperation following the US presidential election results (18.8%)," and "expanding new markets using FTAs such as RCEP (18.8%)." Many opinions suggest that the market will improve once the COVID-19 issue is resolved.

Regarding the most important export competitiveness to overcome COVID-19, "excellent technological competitiveness (73.2%)" was chosen. This was followed by "building buyer and overseas networks (44.2%)," "price competitiveness (31.8%)," and "brand awareness (16.4%)." The regions where SMEs hope to newly enter for market diversification were Europe (28.4%), North America (23.6%), New Southern countries (16.8%), China (12.2%), Japan (9.0%), New Northern countries (8.8%), and Latin America (6.8%).

As key corporate response strategies to rapidly changing trade environments such as COVID-19, "enhancing product competitiveness (55.8%)" ranked highest. This was followed by "strengthening client management (41.6%)," "diversifying export markets (36.4%)," and "strengthening non-face-to-face marketing (20.6%)." Among government priority tasks to expand SME exports, securing export cargo ships and aircraft and supporting freight costs (52.8%) was the most selected by companies.

Kim Tae-hwan, head of the International Trade Department at the Korea Federation of SMEs, stated, "Despite the difficult export environment caused by the COVID-19 pandemic, SMEs are leading South Korea's economic recovery," emphasizing, "the government must strengthen measures against export risks such as protectionism and exchange rate declines that companies are concerned about to ensure that export routes are not blocked."

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