62.5% of Mid-sized Companies Expanded or Maintained Investment Last Year Despite Domestic and International Crises

Junggyeonryeon Announces '2023 Survey Results on Investment Status of Mid-sized Companies'

Despite increasing internal and external uncertainties, 62.5% of mid-sized companies maintained or expanded their investment scale compared to the previous year.

The Korea Federation of Mid-sized Enterprises announced the results of the '2023 Mid-sized Enterprise Investment Performance Survey' on the 10th. This survey was conducted from November 28 to December 12 last year, targeting 304 mid-sized companies.

According to the survey results, despite rapid external environmental changes such as the prolonged Ukraine war, high inflation, high interest rates, high exchange rates, and supply chain instability, nearly half (48.0%) of mid-sized companies maintained their investment scale at the same level as the previous year. Those who increased their investment accounted for 14.5%. Factors driving investment expansion included 'existing business expansion' (47.7%), 'improvement/replacement of aging facilities' (36.4%), 'entry into new businesses' (6.8%), and 'overseas expansion' (6.8%). The proportion of investment expansion among manufacturing mid-sized companies (24.4%) was relatively higher than that of non-manufacturing mid-sized companies (6.9%).

Additionally, mid-sized business owners identified 'corporate tax reduction' (58.6%) as the policy that most helped expand investment. This was followed by 'expansion of investment tax credit rates' (13.8%), 'deregulation to remove obstacles to private investment' (13.2%), and 'support for revitalizing local investment' (4.9%). Furthermore, 44.4% of mid-sized companies selected additional 'corporate tax reduction' as the government's top priority policy task to activate investment. The proportion of mid-sized companies that responded that expanded tax support would drive investment expansion was 42.4%, more than four times higher than those who responded it was irrelevant (9.9%).

The biggest investment hindrance factor identified by mid-sized business owners was 'difficulty in securing funds' (35.9%). Other main investment difficulties included 'labor shortage' (24.0%), 'lack of tax and other support benefits' (14.5%), and 'various regulations such as laws and systems' (13.8%).

Lee Ho-jun, Executive Vice Chairman of the Korea Federation of Mid-sized Enterprises, said, "Despite difficult economic conditions, the total investment amount of mid-sized companies in 2022 recorded 38.9 trillion won, an increase of about 27% compared to the previous year. Following this, the survey results showing that more than half of mid-sized companies maintained or expanded their investments in 2023 are very encouraging." He added, "In addition to specific investment support policies presented in the 2024 economic policy direction, such as the installation of 52 trillion won in facility investment funds, a one-year extension of the temporary investment tax credit for facility investment, and an increase in the R&D investment tax credit rate, we hope that effective support measures that can be felt on the ground, including corporate tax reduction, will be promoted."

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