February SME Business Outlook Index 75.4, Down 2.1 Points from Previous Month

Average Operating Rate of Small and Medium Manufacturing Industries at 72.4% in December

The Small and Medium Business (SMB) Business Outlook Index fell by 2.1 points in February compared to the previous month. This marks the fifth consecutive month of deterioration in the SMB business outlook. The Korea Federation of SMEs announced the results of the "February 2024 SMB Business Outlook Survey," conducted on 3,065 small and medium enterprises, on the 30th.

The Business Outlook Index (SBHI) for February's business conditions dropped 2.1 points from the previous month to 75.4, showing a declining trend for five consecutive months since September. Compared to the same month last year, it decreased by 2.2 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 manufacturing sector's business outlook for February fell 2.4 points from the previous month to 79.3, while the non-manufacturing sector decreased by 1.9 points to 73.8.

In manufacturing, 10 industries showed an increase compared to the previous month, led by Wood and Wood Products (67.6→79.4), Electronic Components, Computers, Audio-Visual and Communication Equipment (80.1→87.0), and Primary Metals (83.2→88.1). Conversely, 13 industries declined, including Other Machinery and Equipment (92.2→80.1), Beverages (95.8→86.3), Printing and Recorded Media Reproduction (88.0→79.9), and Electrical Equipment (92.1→85.1).

In non-manufacturing, the Construction industry (73.2→71.7) fell by 1.5 points compared to the previous month, and the Service industry (76.2→74.2) decreased by 2.0 points.

Within the service sector, four industries, including Arts, Sports and Leisure-related Services (63.2→70.5) and Transportation (79.3→83.7), showed increases, while six industries, such as Professional, Scientific and Technical Services (86.4→80.8), Repair and Other Personal Services (75.9→70.8), and Wholesale and Retail Trade (73.6→70.9), declined.

Looking at the outlook by category across all industries, domestic sales (77.1→74.7), exports (79.7→76.3), operating profits (75.9→72.4), and financial conditions (76.3→76.2) all declined compared to the previous month. Employment levels (95.3→95.0), which show a counter-trend, are expected to slightly improve compared to the previous month.

In January, the biggest management difficulties for SMBs were sluggish domestic demand (62.0%), followed by rising labor costs (46.2%), excessive competition among companies (33.4%), and rising raw material prices (29.6%).

The average operating rate of small and medium manufacturing firms in December last year was 72.4%, down 0.5 percentage points from the previous month but up 0.4 percentage points compared to the same month last year.

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