97% of Gwangju and Jeonnam Companies "Burdened by Rising Raw Material Prices"

[Asia Economy Honam Reporting Headquarters Reporter Park Jin-hyung] It has been revealed that the burden on companies in the Gwangju-Jeonnam region is significantly high due to the recent rapid rise in oil prices and raw material costs.

The Gwangju Chamber of Commerce and Industry (Chairman Jeong Chang-seon) conducted a "Survey on the Management Trends and Response Status of Local Companies" targeting 122 small and medium-sized enterprises in the Gwangju-Jeonnam region from June 20 to 30. As a result, 96.7% of local companies responded that they feel a managerial burden due to the rise in raw material prices.

Local companies reported feeling significant managerial burdens not only from "increased raw material costs (85.6%)" but also from "increased expenses due to inflation (34.7%)" and "increased labor costs (20.3%)" (multiple responses allowed).

Despite some easing of social restrictions due to COVID-19 recently, the business conditions in the first half of this year were mostly reported as "worsened compared to before COVID-19 (45.1%)," followed by "improved compared to before COVID-19 (30.3%)" and "similar to before COVID-19 (24.6%)."

Regarding the most concerning domestic and international environmental variables for the second half of this year, companies cited "raw material price increases (87.7%)" as the top concern, followed by "economic slowdown (55.7%)," "interest rate hikes (39.3%)," "minimum wage increases (29.5%)," and "intensified exchange rate volatility (28.7%)" (multiple responses allowed).

In addition, when asked whether the increase in raw material prices is reflected in delivery prices, 68.9% responded that it is "partially reflected," 27.0% said it is "not reflected," and only 4.1% said it is "fully reflected."

Regarding awareness of the "Delivery (Subcontract) Price Adjustment Consultation System," which allows companies to directly request adjustments or negotiate through associations under the Subcontract Act and Win-Win Cooperation Act when prices such as raw materials rise, 54.9% of respondents said they "do not know well," 36.9% said they "know," and the remaining 8.2% said they "do not know at all."

As for the most necessary support areas to help local companies recover economically and improve management conditions, the largest number of companies answered that "stabilization of prices and raw materials (70.5%)" is urgent. This was followed by "strengthening financial and tax support (46.7%)," "preparing economic stimulus measures (33.6%)," and "improving labor supply conditions (27.9%)" (multiple responses allowed).

A representative of the Gwangju Chamber of Commerce and Industry stated, "Despite the easing of social distancing, business conditions have not fully recovered, and with the rapid rise in raw material prices, local companies are struggling to respond. It is an urgent situation that the government prepares practical support measures such as price and exchange rate stabilization and financial support so that companies can actively respond to changes in domestic and international management environments."

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