68% of SMEs Say "Social Distancing Measures Should Be Eased or Lifted"

Korea Federation of SMEs Announces Survey Results on Social Distancing Adjustment
Last Year's Sales Perception Down 20%p Compared to 2019... Over Half "Unable to Use Support Policies"
"Additional Support Measures Should Be Quickly Prepared as Ruling and Opposition Parties Reach Consensus"

[Asia Economy Reporter Kwak Min-jae] Two out of three small and medium-sized enterprises (SMEs) believe that the social distancing adjustment measures need to be eased or abolished.

The Korea Federation of SMEs announced the results of a “Survey on SMEs’ Opinions Regarding Social Distancing Adjustment Measures” on the 13th. The survey was conducted via telephone from the 7th to the 8th, targeting 300 SMEs.

More than half (51.3%) of the SMEs who responded to the survey evaluated that social distancing contributed to preventing the spread of COVID-19. However, regarding future social distancing adjustment measures, 67.7% responded that the measures should be revised toward easing or abolishing (gradual easing 39.0% + complete abolition 28.7%). Opinions that adjustments should be linked to the COVID-19 situation accounted for 24.3%, while maintaining the current measures (5.7%) and gradually strengthening them (2.3%) were relatively low.

Regarding the perceived changes in sales and customer numbers over the past two years (based on 2019 = 100%), sales dropped sharply immediately after the outbreak of COVID-19, with 78.9% in 2020, 80.6% in 2021, and an expected 85.7% in 2022, showing a gradual recovery trend. Customer numbers showed a similar trend with 78.9% in 2020, 80.0% in 2021, and an expected 85.4% in 2022.

When asked about the time required to recover to pre-COVID-19 business conditions after the abolition of social distancing, the most common response was “within 6 months to 1 year” (30.6%), followed by “within 1 to 2 years” (26.4%) and “within 3 to 6 months” (16.6%).

Regarding government and local government support policies that were most helpful during the past two years since the COVID-19 outbreak, “compensation for business losses” (13.3%), “employment retention support” (13.0%), and “support for quarantine and diagnostic supplies” (6.7%) ranked highest. However, more than half of the responding companies (57.3%) reported that they did not use such support programs. Among the reasons, more than 9 out of 10 (93.6%) cited “not eligible for support.”

Regarding whether the compensation for damages to small business owners due to social distancing was adequate, 49.0% responded that it was insufficient (very insufficient 21.7% + somewhat insufficient 27.3%), greatly exceeding the 12.0% who said it was adequate (very adequate 2.3% + somewhat adequate 9.7%).

As the most urgent policy that the government and local governments should support to revitalize small business owners, “expansion of financial support” (47.3%) was the most common answer, followed by “extension of loan maturity and deferral of interest payments” (20.7%) and “expansion of employment retention support” (20.3%).

Kim Ki-moon, Chairman of the Korea Federation of SMEs, said, “Small business owners and SMEs agree with the positive functions of social distancing, but they are struggling because they have not received sufficient support and compensation for their losses. Since President-elect Yoon Seok-yeol has promised compensation and support for small business owners’ losses, and there is bipartisan consensus on the necessity, we hope that additional support measures will be prepared promptly.”

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