Small and Medium Enterprises' Economic Outlook Declines for 4 Consecutive Months... Biggest Challenge 'Weak Domestic Demand'
Korea Federation of SMEs Announces on the 30th
Service Industry Declines by 0.7 Points
[Asia Economy Reporter Kim Bo-kyung] The Small and Medium Business (SMB) Business Outlook Index fell to 77.6 in February, marking a decline for the fourth consecutive month. The main difficulties faced by companies included sluggish domestic demand and rising labor and raw material costs.
The Korea Federation of SMEs announced on the 30th the results of the February business outlook survey conducted from the 13th to the 20th, targeting 3,150 small and medium enterprises. The February Business Outlook Index (SBHI) stood at 77.6, down 0.1 points from the previous month. This marks a continuous decline for four months since October last year.
The manufacturing sector index (81.1) rose by 1.5 points compared to the previous month, while the non-manufacturing sector (76.1) fell by 0.6 points.
By detailed industry, in manufacturing, 11 sectors showed an increase centered on ▲textile products (up 8.5 points) and ▲rubber and plastic products (up 7.5 points), whereas 11 sectors including ▲beverages (down 14.8 points) and ▲chemical substances and chemical products (down 14.1 points) declined.
Among non-manufacturing sectors, the service industry (76.5) decreased by 0.7 points from the previous month, while construction (74.3) saw a slight increase of 0.1 points.
In January, the biggest difficulty for small and medium enterprises was sluggish domestic demand (60.0%). This was followed by ▲rising labor costs (55.5%), ▲rising raw material prices (39.5%), ▲excessive competition among companies (33.5%), and ▲high interest rates (28.6%).
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The average operating rate of small and medium manufacturing firms in December last year was 72.0%, down 0.5 percentage points from the previous month. Compared to the same month last year, it decreased by 0.6 percentage points.
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