"More Than Half of Bu-Ul-Gyeong Commercial Areas Stagnant or Declining... Difficulties Worsened by COVID-19"

BNK Research Institute Analyzes 146 Commercial Districts... "Government and Local Authorities Must Accelerate Support Policies"

[Asia Economy Yeongnam Reporting Headquarters Reporter Kim Jonghyo] More than half of the major commercial districts in Busan, Ulsan, and Gyeongnam regions have been found to be stagnant or declining.

According to the research report "Analysis of Changes in Major Commercial Districts in the Southeastern Region" released on the 2nd by the BNK Financial Management Research Institute's Southeastern Region Research Center, among 146 major commercial districts in the area, only 63 districts (43.2%) were growing. Stagnant districts numbered 59 (40.4%), and declining districts were 24 (16.4%).

The institute analyzed 146 commercial districts based on towns, townships, and neighborhoods with more than 1,000 businesses in six representative industries that make up commercial districts, including retail, accommodation, and food service industries.

By region, Busan had the most commercial districts with 70, followed by Gyeongnam with 57, and Ulsan with 19.

In Busan, 27 districts were growing, accounting for 38.6% of the total 70 commercial districts in the region. Stagnant districts numbered 25 (35.7%), and declining districts were 18 (25.7%).

In Ulsan, 9 districts were growing, accounting for 47.4% of the total 19 commercial districts. These included three in Ulju-gun (Beomseo-eup, Onsan-eup, Onyang-eup), two each in Nam-gu (Samsan-dong, Sinjeong 2-dong), Jung-gu (Byeongyeong 1-dong, Taehwa-dong), and Buk-gu (Nongso 1-dong, Hyomun-dong).

Stagnant districts numbered 10, accounting for 52.6%, and there were no declining districts.

In Gyeongnam, 27 districts were growing, accounting for 47.4% of the total 57 commercial districts. Changwon City had the most with 11 districts including Naeseo-eup, Bansong-dong, and Buk-myeon. Yangsan City had 5 districts including Dong-myeon, Mulgeum-eup, and Samsung-dong; Gimhae City had 4 districts including Naeoe-dong and Bukbu-dong; and Jinju City had 3 districts including Gaho-dong and Chojang-dong.

Stagnant districts numbered 24, accounting for 42.1%, and declining districts were 6, accounting for 10.5%.

Analysis of the Location Quotient (LQ), which indicates the degree of specialization by industry in major commercial districts, showed that Busan had many districts specialized in shopping, accommodation, cafes, and beauty services. Gyeongnam had many districts specialized in pubs, leisure, and education industries, while Ulsan had relatively fewer districts with high specialization by industry.

With the ongoing economic downturn and the recent outbreak of the novel coronavirus disease (COVID-19), difficulties in local commercial districts have intensified. The floating population in major commercial districts such as Seomyeon, Yeonsan, Sasang, Nampo, and Dongnae in Busan was found to be only 30-40% compared to before the occurrence of confirmed cases.

The research center emphasized that since local small business owners and self-employed individuals are facing critical situations and the ecosystem of local commercial districts is at risk of being damaged, government and local governments need to accelerate the implementation of support policies.

In the mid to long term, a comprehensive review of support policies for commercial districts in the Southeastern region is required, and tailored support measures such as redevelopment and reorganization for stagnant and declining districts, as well as sustainable development of growing districts, should be prepared.

Baek Chung-gi, a research fellow at the BNK Financial Management Research Institute's Southeastern Region Research Center, said, "We hope the scope and scale of support efforts to revitalize local commercial districts will expand," adding, "More consideration is needed to establish and strengthen a crisis response system to prepare for unexpected external shocks such as COVID-19."