Half of Mid-sized Companies Have No Investment Plans This Year

Korea Federation of Mid-sized Enterprises Releases Results of the "2025 Mid-sized Enterprise Investment Outlook Survey" on the 21st

This year, 50.4% of mid-sized companies were found to have no investment plans. This figure represents an increase of 8.7 percentage points compared to the previous year's survey.

The Korea Federation of Mid-sized Enterprises announced the results of the "2025 Mid-sized Enterprise Investment Outlook Survey," including this information, on the 21st. The survey was conducted from November 18 to December 2, 2024, targeting 800 mid-sized companies.

Among those who stated they have no investment plans, 50.4% cited concerns over rapid internal and external environmental changes such as uncertain market conditions (38.2%) and deteriorating business performance (19.6%) as the main reasons.

Among the 49.6% of mid-sized companies that responded they have investment plans, 41.5% said they would increase their investment scale compared to the previous year. Responses indicating maintaining the same level (35.8%) or reducing investment (22.7%) accounted for more than half, totaling 58.5%. Mid-sized companies expecting a decrease in investment pointed to major factors such as ‘sluggish domestic market (40.0%)’, ‘concerns over economic downturn (24.4%)’, ‘increased production costs (10.0%)’, and ‘high interest rates and financing difficulties (7.8%)’.

Mid-sized companies that anticipated an increase in investment cited reasons such as ‘expansion of core businesses (35.7%)’, ‘strengthening entry into new businesses (26.7%)’, ‘expansion of overseas market entry (17.0%)’, and ‘improvement and replacement of aging facilities (11.5%)’.

Investment by mid-sized companies this year is expected to focus domestically. While overseas investment accounted for only 19.6%, domestic facility investment and domestic research and development (R&D) investment were 70.0% and 37.0%, respectively. The most frequently cited investment purpose was ‘repair and maintenance of existing facilities (33.8%)’, followed by ‘new or expanded factories (20.1%)’, ‘R&D investment (19.9%)’, ‘eco-friendly and ESG investment (7.3%)’, and ‘digital transformation investment (6.8%)’.

Policy measures to drive investment expansion by mid-sized companies included ‘expansion of tax support (38.0%)’, ‘price stabilization and revitalization of domestic demand (21.6%)’, ‘interest rate reduction (20.1%)’, ‘strengthening policy finance (8.5%)’, and ‘improvement of management environment such as labor (8.5%)’.

Lee Ho-jun, Executive Vice Chairman of the Korea Federation of Mid-sized Enterprises, stated, “The survey result that half (49.6%) of mid-sized companies plan to proceed with investment this year even if some reduce their scale reconfirms the value of mid-sized companies as a key to overcoming the crisis. However, it is also true that investment is likely to shrink further as internal and external turmoil expands.” He added, “We will do our best to effectively expand the long-term investment capacity of mid-sized companies by boldly lowering the threshold for policy finance to resolve the chronic imbalance between policy finance and internal funds as investment resources, and by urgently improving legal and institutional environments such as labor, environment, and taxation.”

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