Half of Mid-sized Companies Plan to Maintain or Increase Domestic Investment This Year

Junggyeonryeon Announces '2024 Mid-sized Companies Investment Outlook Survey Results'

Despite the anticipated intensification of global economic uncertainties, nearly half?48.5%?of mid-sized companies plan to invest domestically again this year.

The Korea Federation of Mid-sized Enterprises (KFME) announced this on the 1st in the ‘2024 Mid-sized Enterprises Investment Outlook Survey Results.’ The survey was conducted from December 19 last year to January 7 this year, targeting 369 mid-sized companies.

According to the survey results, 91.1% of mid-sized companies that disclosed domestic investment plans responded that they would maintain or expand their current investment scale. Notably, the proportion of companies planning to expand investments rose by 28.1 percentage points from last year to 43.6%. The main reasons cited were ‘expansion of existing industry sector businesses (64.1%)’ and ‘improvement or replacement of aging facilities (32.1%).’ Innovation investment demand for discovering new growth engines followed, including ‘entry into new businesses (25.6%),’ ‘ESG response (6.4%),’ ‘R&D (6.4%),’ and ‘digital transformation (3.8%).’ The primary forms of investment by mid-sized companies were ‘repair and maintenance of existing facilities (55.9%),’ ‘introduction of new facilities (44.7%),’ ‘R&D (25.7%),’ ‘human resource development (11.2%),’ and ‘eco-friendly initiatives (11.2%).’

16.3% of mid-sized companies responded that they plan to invest overseas this year. This is to address ‘increased overseas demand (40.0%),’ ‘cost reduction (35.0%),’ ‘understanding global market trends (35.0%),’ and ‘strengthening external cooperation networks (26.7%).’

41.7% of mid-sized companies have postponed their investment plans to next year or later. Among those who responded that they have investment plans this year, the main obstacles cited were ‘financing difficulties (58.7%),’ ‘labor shortages (29.1%),’ and ‘complex administrative procedures such as permits and approvals (20.7%),’ along with ‘labor and employment regulations (19.0%),’ ‘environmental regulations (17.9%),’ and ‘location regulations related to new or expanded factories (15.6%).’ The most needed government support policy to activate investment was ‘expansion of financial support (55.3%).’

Lee Hojun, Executive Vice Chairman of KFME, said, “Considering the high economic contribution of mid-sized companies, it is a very meaningful signal that nearly half of them responded that they will continue domestic investment despite rapid changes in the internal and external economic environment.” He added, “To strengthen the global competitiveness of mid-sized companies, which are the ‘backbone’ of the economy, it is necessary to identify and improve ‘killer regulations’ and ‘shadow regulations’ that hinder their investment, and to make active policy efforts to alleviate financing difficulties by expanding policy finance and guarantee scales.”

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