December SME Business Outlook Index 78.8... Down 1.9 Points from Previous Month

Average Operating Rate of Small and Medium Manufacturing Industries in October at 72.8%
Down 0.1 Percentage Points from Previous Month

The Small and Medium Business (SMB) Business Outlook Index for December fell by 1.9 points compared to the previous month. This marks the third consecutive month of deterioration in the business outlook for SMBs.

The Korea Federation of SMEs (Chairman Kim Ki-moon) announced the results of the 'December 2023 SMB Business Outlook Survey' conducted on 3,056 small and medium enterprises on the 29th.

The December Business Outlook Index (SBHI) dropped 1.9 points from the previous month to 78.8, showing a declining trend for three consecutive months since September. Compared to the same month last year, it decreased by 2.9 points. An index above 100 indicates that more companies have a positive outlook on the economy than those with a negative outlook, while an index below 100 indicates the opposite.

The December business outlook for manufacturing fell 3.6 points from the previous month to 80.9, while non-manufacturing declined 1.2 points to 77.8. Construction (78.2) dropped 2.6 points from the previous month, and services (77.8) decreased by 0.8 points.

Within manufacturing, six sectors showed an increase compared to the previous month, led by Other Transportation Equipment (88.6→96.0, up 7.4 points), Other Machinery and Equipment (83.9→88.8, up 4.9 points), and Apparel, Apparel Accessories, and Fur Products (85.6→87.5, up 1.9 points). Conversely, 17 sectors declined, including Medical Substances and Pharmaceuticals (102.0→89.3, down 12.7 points), Printing and Recorded Media Reproduction (97.3→87.6, down 9.7 points), Beverages (95.1→85.6, down 9.5 points), and Food Products (101.0→91.6, down 9.4 points).

In non-manufacturing, construction (80.8→78.2) fell 2.6 points from the previous month, and services (78.6→77.8) declined by 0.8 points.

Within services, three sectors rose, including Educational Services (86.4→89.6, up 3.2 points) and Professional, Scientific, and Technical Services (86.5→87.8, up 1.3 points), while seven sectors declined, including Arts, Sports, and Leisure-related Services (79.6→67.1, down 12.5 points) and Real Estate (80.1→75.4, down 4.7 points).

Additionally, domestic sales (80.4→78.7), exports (81.3→79.9), operating profits (77.1→76.8), and financial conditions (77.8→77.0) all declined compared to the previous month. Employment levels (94.7→94.8), which show a reverse trend, are also expected to slightly worsen compared to the previous month.

Comparing the December SBHI with the average SBHI for the same month over the past three years by category, manufacturing shows improvements in financial conditions, raw materials, and facilities. Other categories are expected to worsen compared to the previous three-year average. In non-manufacturing, export outlooks have deteriorated, while domestic sales remained stable, and other categories are expected to improve compared to the previous three-year average.

The top management difficulties for SMBs in November were sluggish domestic demand (61.8%), followed by rising labor costs (46.6%), excessive competition among companies (34.3%), and rising raw material prices (34.2%).

The average operating rate of small and medium manufacturing enterprises in October was 72.8%, down 0.1 percentage points from the previous month but up 0.7 percentage points compared to the same month last year.

By company size, small enterprises (69.3%→69.4%) increased by 0.1 percentage points from the previous month, while medium enterprises (76.9%→76.6%) decreased by 0.3 percentage points.

By company type, general manufacturing (71.9%) remained flat compared to the previous month, while innovative manufacturing (75.2%→75.0%) declined by 0.2 percentage points.

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