Venture Companies' Q1 Economic Sentiment 'Worst Ever'... "Limited Recovery in Q2"

Venture Business Association Announces Venture Business Economic Sentiment Index
Q1 BSI at 78.6... First Drop Below 80 Since Survey Began
Main Reasons: "Sluggish Domestic Sales," "Financial Difficulties"
Q2 Outlook Index Slightly Up at 96.5

The economic conditions perceived by domestic venture companies have fallen to the lowest level since statistics began to be compiled. The combined effects of economic slowdown, financial difficulties, and sluggish domestic demand are increasing the challenges faced by companies.

According to the '2025 Q1 Venture Business Economic Sentiment Index (BSI)' announced by the Venture Business Association on the 3rd, the Q1 BSI recorded 78.6, falling below 80 for the first time since the survey began. It dropped 6.4 points from the previous quarter, showing a decline for three consecutive quarters.

Companies that responded that their Q1 business performance 'worsened' cited 'sluggish domestic sales (81.1%)' as the main reason. Additionally, the response indicating 'financial difficulties' increased by 12.7 percentage points from the previous quarter to 56.1%, indicating a deterioration in corporate liquidity.

By industry, the business performance index for manufacturing fell 5.1 points from the previous quarter to 78.4, while the service sector dropped 8.0 points to 79.3. The manufacturing business performance index has declined for three consecutive quarters since Q2 last year, and the service sector, which had entered an upward trend last year, declined again in Q1.

By category, the performance indices for management performance (81.4), financial situation (80.2), cost expenditure (86.1), and workforce situation (94.5) all fell short of the baseline of 100. In particular, the categories of 'management performance,' 'financial situation,' and 'cost expenditure' showed a slowing trend, while 'workforce situation' was the only category to slightly increase by 0.1 points compared to the previous quarter.

The Q2 venture business economic outlook index rose 7.6 points from 88.9 in the previous quarter to 96.5. However, it still remains below the baseline following Q1, indicating a delayed economic recovery for venture companies in Q2.

Among venture companies expecting the business climate to 'improve,' 75.8% forecast an improvement in domestic sales, expressing optimism about the recovery of domestic market demand. Conversely, those expecting the business climate to 'worsen' cited 'sluggish domestic sales (68.3%),' 'financial difficulties (45.0%),' and 'rising labor costs (21.8%)' as the main downward economic factors.

Song Byung-jun, Chairman of the Venture Business Association, stated, "The Q1 venture business economic performance index falling below 80 and recording the lowest level clearly reflects the current stagnant situation of the venture industry," adding, "It is highly likely that economic sluggishness will continue in Q2 as well. To overcome the domestic and international economic recession, multifaceted support from the government and the National Assembly is necessary."

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