Busan Economy Reviving? Increase in Newly Established Corporations Signals Recovery... High Proportion of Small Businesses Suggests Caution

601 New Corporations Established in Busan in April, Surpassing 600 Again After 11 Months

Manufacturing Up 40.7% Compared to Same Month Last Year, Most Sectors See Double-Digit Growth

Structural Challenge Remains Due to Overwhelming Proportio

Trends of Newly Established Corporations in the Busan Area Over the Past Year.

[Asia Economy Yeongnam Reporting Headquarters Reporter Kim Yong-woo] Recently, in April, the number of newly established corporations in the Busan area has once again exceeded 600, signaling a positive sign for the local economic recovery.

According to the 'Busan Newly Established Corporations Status' announced by the Busan Chamber of Commerce and Industry (Chairman Jang In-hwa) on the 15th, the total number of newly established corporations in Busan in April was 601, showing an increase of 19.0% compared to the same month last year and 8.7% compared to the previous month.

This is the first time in 11 months that the number of newly established corporations in a month has exceeded 600 since the record high of 681 in June last year.

Looking at the trend of newly established corporations over the past year, last year Busan saw a surge in the establishment of corporations in the real estate services sector, fueled by the real estate boom. Although a record high was set in June last year, following the government's announcement of the June 17 real estate measures and the subsequent strengthening of regulations on corporate real estate, the number dropped to the year's lowest at 345 in October.

The downward trend reversed in November last year with 405 corporations, followed by steady increases: 459 in December, 531 in January, 553 in March, and 601 in April, showing a consistent upward trajectory.

By industry in April, manufacturing saw 76 new corporations established, a remarkable 40.7% increase compared to the same month last year. This was followed by transportation (31.3%), distribution (22.6%), construction (16.9%), services (15.8%), and real estate and equipment rental (14.7%).

Most industries experienced significant increases in newly established corporations, indicating high expectations for economic recovery in the startup market.

Supporting this optimistic sentiment, the regional manufacturing and retail distribution business outlook indices, which are indicators of perceived economic conditions, recorded '81' and '91' respectively in the second quarter. These figures represent a substantial increase compared to '69' and '60' in the previous quarter.

However, despite the increase in newly established corporations, 77% of the new corporations in April were small-scale with capital of 50 million KRW or less, suggesting some limitations in the role of newly established corporations in terms of local economic growth and revitalization.

A representative from the Busan Chamber of Commerce and Industry explained, “Since newly established corporations serve as a coincident indicator of the economy, the recent increase reflects one aspect of the local economy recovering from the impact of COVID-19, and various leading indicators also support this.”

They added, “To ignite the hard-earned entrepreneurial enthusiasm, active government economic stimulus measures and diverse startup support plans tailored to local characteristics need to be prepared.”