SMEs, May Exports and Employment Increased... "Holding Up Well Amid Adverse Conditions"

A logistics warehouse of a small and medium-sized enterprise located in Cheonan, Chungnam.

[Asia Economy Reporter Choi Dong-hyun] Despite adverse domestic and international conditions such as rising prices and the Ukraine crisis, exports and employment in domestic small and medium-sized enterprises (SMEs) have increased.

According to the 'KOSI SME Trends June Issue' published on the 29th by the Korea Small Business Institute (KOSI), SME exports in May recorded $10.4 billion (approximately 13.4 trillion KRW), up 10.6% compared to the same month last year. This was due to favorable performance in key SME items such as plastic products (3.9%) and synthetic resins (3.5%) despite the growing uncertainty in economic conditions. However, SME exports to China (-2.3%) and Hong Kong (-13.4%) decreased compared to the same month last year due to China's lockdown measures.

The number of SME employees in May was 25.46 million, an increase of 730,000 compared to the same month last year, continuing the employment recovery trend. By industry, the increase was significant mainly in service sectors such as information and communications (12.6%), professional, scientific, and technical services (7.4%), and health and social welfare services (5.1%). Employment in manufacturing also increased slightly (1.8%).

SME manufacturing production in April decreased by 0.8% compared to the same month last year due to increased uncertainty in external conditions. On the other hand, SME service production increased by 4.4% due to the lifting of social distancing measures.

The number of startup companies in April was 111,054, down 14.7% compared to the same month last year. This appears to be a reaction to the recovery in the employment market leading to a decrease in startups.

A representative from the Korea Small Business Institute explained, "The SME economy is showing a moderate recovery centered on the service sector due to the lifting of social distancing measures," adding, "Accordingly, the employment situation in SMEs is also improving." They continued, "However, various risk factors are emerging in the domestic and international environment surrounding SMEs, such as the prolonged Ukraine crisis, US interest rate hikes, and continued rises in prices and exchange rates," and added, "Since these factors are difficult to overcome in the short term through SMEs' self-help efforts alone, active responses from policy authorities are necessary to sustain the economic recovery."

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