80% of Gwangju Manufacturing Companies Report Business Deterioration Due to COVID-19 Pandemic

Urging Policies to Revitalize Domestic Demand and Consumption

Attempts to Diversify Sales and Supply Channels

Business Deterioration Expected to Continue Next Year

[Asia Economy Honam Reporting Headquarters Reporter Lee Gwan-woo] It has been revealed that 8 out of 10 manufacturing companies in the Gwangju area suffered severe business damage due to the COVID-19 pandemic this year.

According to the results of the 'COVID-19 Damage Impact' survey conducted by the Gwangju Chamber of Commerce and Industry from the 27th of last month to the 19th of this month targeting 131 local manufacturing companies, 81.7% of respondents reported direct or indirect damage due to the COVID-19 aftermath.

Among them, 49.5% reported 'direct damage' such as sales decline and financial pressure, while 50.5% responded that they experienced 'indirect damage' such as delays in business schedules and difficulties in securing manpower.

The perceived degree of COVID-19 damage varied by company. Small and medium-sized enterprises mainly responded that they experienced 'direct damage' (41.0%) due to difficulties in procuring parts and materials and delivery delays, whereas 50% of large companies responded that they experienced 'indirect damage.' For large companies, 'direct damage' such as sales and order volume decline and financial pressure accounted for 35.7%, and only 14.3% responded that there was 'no damage.'

The types of damage in domestic and export sectors also showed a clear divide. Among export companies, 55.2% cited 'direct damage' such as reduced export volume, logistics and customs clearance difficulties, and suspension of overseas factory operations. 'Indirect damage' included difficulties in discovering new clients due to the cancellation of overseas exhibitions, accounting for 27.6% of responses.

For domestic companies, 45.1% responded that labor and manpower management difficulties and reduced business opportunities were indirect damage, while 36.6% reported direct damage such as sales decline due to domestic demand contraction.

Regarding the overall business situation this year, 65.6% of respondents answered that the business situation 'worsened compared to last year,' followed by 23.7% who said it was 'similar to the previous year,' and 10.7% who said it 'improved compared to the previous year.'

Regarding this year's business performance, 66.4% expected to 'fall short of targets,' 28.2% to 'achieve or approach targets,' and 5.3% to 'exceed targets.'

Additionally, the general view among respondents was that this year's sales would decrease by about 10.0% compared to last year.

53.4% of respondents predicted that the economic crisis caused by the COVID-19 aftermath would 'continue for up to one year.'

As business countermeasures, 'diversification of sales and supply sources' was cited by 45.0%, 'utilization of government support policies' by 41.2%, 'reduction of daily expense budgets' by 36.6%, and 'discovery of new businesses' by 33.6%.

For economic recovery, domestic demand and consumption revitalization (51.9%) was chosen as the top priority policy. In addition, respondents said that policy support such as financial and tax support (44.3%), corporate operating fund support (43.5%), and employment maintenance and stability support (38.2%) are necessary.

A representative of a manufacturing company in the Gwangju area said, "We are experiencing production and delivery delays and reduced business opportunities due to COVID-19, and as the sales decline trend continues, we are facing severe financial pressure," adding, "It is urgent to restore consumer and investment sentiment in response to the prolonged economic recession, and it is crucial to expand policy fund support and deregulation so that companies struggling due to COVID-19 can receive practical help."

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