Despite Expectations for With-Corona... SME Business Outlook Growth Slows Down

Korea Federation of SMEs Announces 'November SME Business Outlook Survey'
Next Month's Business Outlook Index 81.5... Down 1.9P from Previous Month
Raw Material Supply Shortage, Logistics Issues Continue... Accommodation and Food Services Up 13.8P

Korea Trade Achieves New Record Overcoming COVID-19
(Busan=Yonhap News) Reporter Son Hyung-joo = On the afternoon of the 26th, Busan Port was bustling.
South Korea's annual trade volume surpassed 1 trillion dollars in the shortest period ever. The Ministry of Trade, Industry and Energy and the Korea Customs Service announced at around 1:53 p.m. on the 26th that exports reached 512.2 billion dollars and imports 487.8 billion dollars, exceeding a total trade volume of 1 trillion dollars. This is the first time since trade statistics began in 1956 that the 1 trillion dollar mark was surpassed in October. 2021.10.26
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[Asia Economy Reporter Junhyung Lee] Despite the increase in COVID-19 vaccination rates and expectations for With Corona (gradual return to daily life), the outlook for small and medium-sized enterprises (SMEs) deteriorated next month.

The Korea Federation of SMEs announced on the 28th that the Small and Medium Business Outlook Index (SBHI) for next month fell by 1.9 points to 81.5 compared to the previous month, based on a survey conducted from the 15th to the 22nd of this month targeting 3,150 SMEs in the 'November 2021 SME Business Outlook Survey.' Compared to the same period last year, this is an increase of 7.5 points. An SBHI above 100 means that more companies have a positive business outlook than those who do not. Below 100 means the opposite. The prolonged COVID-19 pandemic has left the economy unstable, and ongoing raw material supply shortages and shipping/logistics difficulties are believed to have broken the upward trend that had continued for two consecutive months since September this year.

The manufacturing sector's business outlook for next month dropped by 2.9 points from the previous month to 85.8. The non-manufacturing sector fell by 1.3 points to 79.3. Construction and service industries decreased by 0.3 points and 1.5 points respectively compared to the previous month.

Small and Medium Business November Business Outlook Index (SBHI).
[Photo by Korea Federation of SMEs]

In manufacturing, the business outlook rose in 10 industries including beverages and furniture. However, 12 industries such as metal processed products and non-metallic mineral products showed a downward trend.

In the service sector, 'Accommodation and Food Services,' which includes restaurants where operating hour restrictions will be lifted from next month, increased by 13.8 points from 57.7 to 71.5. 'Real Estate and Rental Services' also rose from 72.4 to 84.6. On the other hand, six industries including transportation and wholesale and retail trade declined.

The export outlook rose from 83.6 to 91.2. However, domestic demand, operating profit, financial conditions, and employment outlook all showed a decline compared to the previous month.

SMEs cited 'domestic demand slump (61.4%)' as the biggest difficulty last month. This was followed by rising raw material prices (44.1%), excessive competition among companies (40.6%), and rising labor costs (39.9%).

The average operating rate of small and medium manufacturing firms in September this year was 71.9%, up 1 percentage point from the previous month. Compared to the same period last year, it rose by 3 percentage points. By company size, small enterprises recorded 67.1%, down 0.2 percentage points from the previous month. Medium-sized enterprises rose 2.2 percentage points to 76.6%. By company type, general manufacturing increased by 1 percentage point to 71.7% compared to the previous month. Innovative manufacturing showed a 9.6 percentage point increase to 74.5% from the previous month.

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