August Small Business Business Outlook Index 79.7... Up 0.6p from Previous Month

Two-Month Consecutive Decline Stopped
Survey Conducted on 3,062 Small and Medium Enterprises

The Small and Medium Enterprise (SME) Business Outlook Index stopped its two-month consecutive decline and showed a slight rebound.

According to the Korea Federation of SMEs on the 30th, the 'August 2023 SME Business Outlook Survey' was conducted from the 13th to the 20th targeting 3,062 SMEs. The business outlook index rose by 0.6 points from the previous month to 79.7. Compared to the same month last year, it increased by 1.2 points. The business outlook index had been declining consecutively in June and July.

Photo by Korea Federation of SMEs

The manufacturing sector's business outlook for August fell by 3.5 points from the previous month to 80.6, while the non-manufacturing sector rose by 2.4 points to 79.3.

By industry, in manufacturing, seven sectors including industrial machinery and equipment repair and furniture showed an increase compared to the previous month, whereas 15 sectors such as medical substances and pharmaceuticals, automobiles and trailers, and leather bags and shoes declined. In non-manufacturing, construction increased by 6.4 points from the previous month, and the service industry also rose by 1.5 points.

Within the service industry, five sectors including professional, scientific, and technical services, as well as arts, sports, and leisure-related services, declined, while five sectors such as education services and wholesale and retail trade increased.

Domestic sales and exports decreased by 0.1 points and 6.2 points respectively compared to the previous month, but operating profits rose by 0.7 points and financial conditions improved by 1.8 points. Employment levels, which have been on a counter-trend, are expected to slightly improve.

Comparing the August business outlook index with the average business outlook index for the same month over the past three years, manufacturing is expected to improve in all categories compared to the previous three-year average. In non-manufacturing, export outlook worsened, but other categories are expected to be better than the previous three-year average.

The biggest management difficulty for SMEs this month was sluggish domestic demand (61.9%). This was followed by rising labor costs (43.7%), excessive competition among companies (33.4%), and rising raw material prices (31.2%).

The average operating rate of small and medium manufacturing enterprises last month was 72.4%, up 0.5 percentage points from the previous month but down 0.1 percentage points compared to the same month last year. By company size, small enterprises and medium enterprises increased by 0.7 percentage points and 0.3 percentage points respectively.

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