Impact of Social Distancing Easing... SME Business Outlook for November Rebounds for 2 Consecutive Months

Average Operating Rate of Small and Medium Manufacturing Industries in September Slightly Rises Compared to Previous Month

Photo by Asia Economy DB

[Asia Economy Reporter Kim Heeyoon] The business outlook for small and medium-sized enterprises (SMEs) has slightly improved, supported by a decrease in COVID-19 cases, the easing of social distancing to level 1, and a recovery in exports.

According to the Korea Federation of SMEs on the 29th, a survey titled "November SME Business Outlook Survey" was conducted from the 15th to the 22nd targeting 3,150 SMEs. The November Business Outlook Index (SBHI) rose by 2.8 points from the previous month to 74.0.

The Korea Federation of SMEs analyzed, "This figure shows a rebound for two consecutive months since September, when the upward trend was halted due to the nationwide resurgence of COVID-19. The easing of social distancing to level 1 following the decrease in confirmed cases and the recovery in exports positively influenced the perceived business conditions."

In manufacturing, the November business outlook rose 4.1 points from the previous month to 81.0, while non-manufacturing increased by 2.2 points to 70.4.

Looking at the business cycle items, October domestic sales rose 3.5 points from the previous month to 74.0, and forecasts for exports (80.8→85.0), operating profits (67.6→71.2), and financial conditions (66.7→69.3) all improved.

The main difficulties faced by SMEs in October (multiple responses allowed) were sluggish domestic demand (71.2%), excessive competition among companies (38.1%), rising labor costs (36.1%), and delays in payment collection (24.3%).

The average operating rate of small and medium-sized manufacturers in September was 68.9%, up 1.3 percentage points from the previous month.