Gumi Chamber of Commerce and Industry... Survey on Sales, Profitability Outlook, and Difficulties of Manufacturing Companies

Sales Targets in Jeopardy Due to Domestic Market Stagnation and Export Slowdown
Profitability Worsens Amid Rising Raw Material and Labor Costs
"Urgent Need for Practical Incentives in Local Regions"

The Gyeongbuk (Gumi) Chamber of Commerce and Industry (Chairman Yoon Jaeho) announced the results of its "Gumi Manufacturing Companies Sales, Profitability Outlook, and Difficulties Survey," which was conducted from September 1 to 12 targeting 102 manufacturing companies in the region.

According to the survey, 62.7% of Gumi-based manufacturers expect their annual sales performance this year to fall short of their original targets, while 37.3% responded that they would meet or exceed their goals.

Gumi Chamber of Commerce and Industry exterior photo / Provided by Gumi Chamber of Commerce and Industry

The main obstacles hindering sales growth for these companies were identified as follows: sluggish domestic market (44.1%), slowdown in export market conditions (25.5%), intensifying market competition (19.6%), and production disruptions such as supply chain issues (7.8%).

Regarding annual operating profit performance compared to their initial plans, 66.7% of companies expect to fall short of their targets, indicating an even gloomier outlook for profitability. Only 33.3% responded that they would meet or exceed their profit goals.

In terms of operating balance outlook, 37.2% of companies reported that they had turned to or maintained a surplus, 38.2% were maintaining break-even levels, and 24.5% had turned to or continued to operate at a deficit.

When asked about the main cost factors worsening profitability, companies cited rising raw material prices (36.3%), increased labor costs (24.5%), higher tariffs (15.7%), rising energy costs (8.8%), and increased financial costs such as interest (7.8%), in that order.

The biggest challenges faced in production and organizational management were identified as workforce supply and demand (41.2%), company funding conditions (27.5%), responding to corporate regulations (9.8%), supply chain management such as parts procurement (9.8%), and labor-management relations (8.8%).

Meanwhile, regarding the regular National Assembly session being held for 100 days from September, companies cited the following as the most concerning legislative areas in terms of business burden: increases in corporate costs such as corporate tax (23.0%), increased labor-management burden (19.6%), strengthening of corporate system regulations such as the Commercial Act and Fair Trade Act (16.7%), tightening of regulations related to location and environment (12.3%), increased employment burden such as extension of retirement age (11.3%), and expansion of market regulations such as the supply price linkage system (4.9%).

On the other hand, the legislative areas considered most necessary for corporate growth and improved business performance were: the need for greater flexibility in employment and the labor market (27.9%), support for revitalizing the local economy (26.0%), support for stabilizing supply chains such as parts procurement (11.8%), and expansion of investment and R&D incentives (9.3%).

Shim Gyujeong, team leader at the Gumi Chamber of Commerce and Industry, stated, "Business conditions are deteriorating due to a combination of factors such as domestic market stagnation, rising raw material and labor costs, and growing external uncertainties," adding, "To overcome these challenges, it is urgent to provide practical incentives to local areas, such as applying differential corporate, inheritance, and income tax rates outside the capital region, and lowering industrial electricity rates in Gyeongbuk, where nuclear power plants are concentrated."

Meanwhile, on September 30, the Gyeongbuk Chamber of Commerce and Industry Council issued a resolution to overcome the regional economic crisis, and the Non-Capital Region Chamber of Commerce and Industry Council plans to hold a forum on November 24 at the National Assembly to discuss differentiated tax reform for balanced national development.

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