Han-German Chamber of Commerce and Industry Announces Results of COVID-19 Status Survey Conducted Among Member Companies

German Companies in Korea Expected to Maintain Domestic Employment and Production Despite Declining Performance

The Korean-German Chamber of Commerce and Industry (KGCCI, represented by Barbara Zollmann) announced the results of a survey conducted on April 7 targeting its member companies regarding the impact of the COVID-19 pandemic. The survey was conducted from March 19 to April 2, with a total of 82 companies participating, including 63 German companies operating in Korea, 15 Korean companies, and 4 Korean-German joint ventures.

The survey results revealed that the COVID-19 pandemic has had a significant impact on the management of both German and Korean companies operating domestically. Among the respondents, 33% evaluated the current status of their companies during the COVID-19 crisis as poor, while 67% did not consider it poor but showed somewhat pessimistic views from a mid-term perspective. For the next 12 months, 50% of respondents, and 79% in the mid-term outlook, gave negative assessments regarding business and economic conditions.

Notably, although a majority (61%) expected local investment to decrease in the long term, the same percentage (61%) responded that local employment would either "increase or be maintained at the current level" over the next 12 months, expressing a commitment to maintaining employment. Furthermore, despite significant changes in work and management practices due to various health and safety measures to prevent the spread of COVID-19, only 1.7% of companies are currently experiencing or expect to experience "production stoppages."

However, the majority (67%) of companies anticipated that their performance this year would decrease by up to 10% or more. The biggest challenges that respondents have already experienced or expect to face due to COVID-19 were "decreased consumer demand" (52%) caused by weakened consumer sentiment, followed by "supply disruptions" (21%) due to the global spread of COVID-19, and "uncertainty about future business and investment" (17%).

Additionally, 34% of the respondents expected that the domestic business affected by COVID-19 would recover in the third quarter of this year, while 27% anticipated full recovery in the fourth quarter, and 26% expected it in 2021.

In particular, when asked about the types of support measures needed from the Korean government, the most prevalent opinions were "financial support for maintaining employment such as tax benefits and subsidies" (30%) and "establishing regulatory frameworks for flexible working hours accounts, reduced working hours, and forced leave" (30%). These were followed by "interest-free loans and incentives for severely affected industries or companies providing telecommuting infrastructure" (21%) and "purchase incentives or interest-free loans for corporate liquidity and additional revenue" (16%).

Barbara Zollmann, CEO of the Korean-German Chamber of Commerce and Industry, emphasized, "As uncertainty in the global economy grows due to COVID-19, it is more important than ever for the Korean government to expand support for companies, including interest-free loans, subsidies, and tax benefits, to sustain business operations and maintain employment."