SME Sector "November Economy to Get Tougher Compared to Previous Month"

Domestic small and medium-sized enterprises (SMEs) expected the economy in November to worsen compared to the previous month.

The Korea Federation of SMEs announced on the 30th the results of the 'November SME Business Outlook Survey' conducted from the 13th to the 20th, targeting 3,048 SMEs. The November Business Outlook Index (SBHI) stood at 80.7, down 2 points from the previous month. This marks a decline for two consecutive months. The SBHI uses 100 as the baseline, with values above indicating economic improvement and below indicating deterioration.

The manufacturing sector's November SBHI recorded 84.5, down 4 points from the previous month. The non-manufacturing sector fell by 1.1 points to 79. Construction (80.8) dropped 2.7 points, and services (78.6) decreased by 0.8 points compared to the previous month.

Within manufacturing, eight industries showed month-on-month increases, led by beverages (88.1→95.1), leather bags and shoes (76.1→84), and non-metallic mineral products (75.8→83.6). Conversely, 14 industries declined, including metal processed products (85.6→75), other machinery and equipment (94.5→83.9), and wood and wood products (87.5→78.2). The industrial machinery and equipment repair sector (91) remained steady compared to the previous month.

In non-manufacturing, construction (83.5→80.8) fell by 2.7 points, and services (79.4→78.6) decreased by 0.8 points. Among service industries, education services (81.1→86.4), real estate (76.6→80.1), and two other sectors saw increases. Meanwhile, arts, sports, and leisure-related services (87.6→79.6), transportation (87.9→82), and four other sectors experienced declines.

Among all industries, domestic sales (82.3→80.4), exports (82.5→81.3), operating profits (79.5→77.1), and financial conditions (79.2→77.8) all decreased compared to the previous month. Employment levels (93.5→94.7), which show a reverse trend, were also expected to worsen slightly.

Comparing the November SBHI with the average SBHI for the same month over the past three years by category, manufacturing is expected to see deterioration in exports and inventory, while other categories are projected to improve compared to the three-year average. For non-manufacturing, export outlook worsened, but other categories are expected to improve relative to the previous three-year average.

The main management difficulties for SMEs in October were sluggish domestic demand (59.1%), followed by rising labor costs (46.2%), rising raw material prices (35.6%), and excessive competition among companies (35%).

The proportion of responses citing rising raw material prices (34.2→35.6), excessive competition among companies (34.4→35), and high interest rates (23.6→25.2) increased compared to the previous month. In contrast, delayed collection of sales proceeds (18.9→18.8), rising labor costs (46.6→46.2), and sluggish domestic demand (60.1→59.1) decreased in response rate compared to the previous month.

As of September, the average operating rate of small and medium-sized manufacturing enterprises was 72.9%, up 0.8 percentage points from the previous month and 1.2 percentage points higher than the same month last year.

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