December SME Export Value Hits Record High of $10.6 Billion... Employment Market Remains Sluggish

Export Value Hits $10.59 Billion... Record High, Employment Market 'Sluggish'

Exports by small and medium-sized enterprises (SMEs) recorded the highest level since the compilation of related statistics, but as the employment market weakness deepens, structural improvements to enhance survival capabilities along with financial support for SMEs are required. Photo by Asia Economy DB

[Asia Economy Reporter Kim Heeyoon] The employment crisis among small and medium-sized enterprises (SMEs) worsened last month amid the ongoing COVID-19 pandemic. Although SME exports reached an all-time high since related statistics began, the deepening slump in the job market calls for financial support for SMEs alongside structural reforms to enhance their resilience.

According to the 'KOSBI SME Trends January 2021' report published by the Small and Medium Business Research Institute on the 25th, SME exports in December last year increased by 14.0% compared to December 2019. The export value reached $10.59 billion, marking the highest level since SME export statistics were first compiled.

During the same period, large enterprises' exports rose by 11.4% year-on-year. With SME exports growing at a faster pace than those of large enterprises, SMEs accounted for more than 20% of the total export value.

The employment market for SMEs continued to face a severe downturn. In December last year, the number of employees in SMEs with fewer than 300 workers was 23.771 million, a decrease of 735,000 compared to the same period the previous year. This decline was larger than the previous month’s drop of 342,000, with the number of employees in small accommodation and food service businesses particularly falling by 308,000 to 2.009 million.

The SME Business Health Index (SBHI) stood at 66.0, down 6.5 points from the previous month. In January this year, the SME SBHI dropped 7.0 points from the previous month to 65.0. The service sector (-17.8 points) saw a much sharper decline compared to manufacturing (-4.5 points).

The Small Business Sentiment BSI also fell sharply by 28.3 points to 51.6. The Traditional Market Sentiment BSI dropped 33.7 points from the previous month to 44.8.

No Minseon, head of the Future Strategy Research Group at the Small and Medium Business Research Institute, stated, "Although exports continue to rise following the previous month, consumption has turned downward and the employment market is worsening. Small business sectors with excessive startups, such as accommodation and food services and retail, are taking a direct hit, raising concerns about deepening employment polarization between large enterprises and SMEs." She added, "Therefore, it is necessary to continue financial support for SMEs while promoting structural reforms to enhance their survival capabilities."