SME Business Outlook Index at 77.5 in January Next Year... Down 1.3 Points from Previous Month

Average Operating Rate of Small and Medium Manufacturing Industries at 72.9% in November

The Small and Medium Business (SMB) Business Outlook Index for January 2024 fell by 1.3 points compared to the previous month. This marks the fourth consecutive month of deterioration in the SMB business outlook. The Korea Federation of SMEs (Chairman Kim Ki-moon) announced the results of the 'January 2024 SMB Business Outlook Survey' conducted on 3,052 small and medium enterprises on the 27th.

The Business Outlook Index (SBHI) for January dropped 1.3 points from the previous month to 77.5, showing a declining trend for four consecutive months since September. It has been below 80 for two consecutive months and decreased by 0.2 points compared to the same month last year. An index above 100 means more companies have a positive outlook on the economy than those who do not, while an index below 100 indicates the opposite.

The manufacturing sector's business outlook for January rose by 0.8 points from the previous month to 81.7, while the non-manufacturing sector fell by 2.1 points to 75.7. The construction industry (73.2) dropped 5.0 points from the previous month, and the service industry (76.2) decreased by 1.6 points.

Within manufacturing, 12 industries showed an increase compared to the previous month, centered on beverages (85.6→95.8), rubber and plastic products (64.6→71.8), electrical equipment (86.6→92.1), and automobiles and trailers (87.6→91.4). Eleven industries, including non-metallic mineral products (76.8→65.2), wood and wood products (77.1→67.6), and medical substances and pharmaceuticals (89.3→82.9), declined compared to the previous month.

In the non-manufacturing sector, construction (78.2→73.2) fell by 5.0 points from the previous month, and services (77.8→76.2) dropped by 1.6 points.

Within the service industry, only the education services sector (89.6→89.9) showed an increase, while nine sectors, including publishing, video, broadcasting, telecommunications and information services (90.7→83.7), business facility management, business support and rental services (87.1→81.7), and arts, sports and leisure-related services (67.1→63.2), declined.

Looking at the outlook by item across all industries, domestic sales (78.7→77.1), exports (79.9→79.7), operating profit (76.8→75.9), and financial conditions (77.0→76.3) all declined compared to the previous month. Employment level (94.8→95.3), which is a counter-trend indicator, is also expected to worsen compared to the previous month.

In December, the biggest management difficulty for SMBs was sluggish domestic demand (61.0%), followed by rising labor costs (47.7%), excessive competition among companies (35.3%), and rising raw material prices (32.7%).

The average operating rate of small and medium manufacturing enterprises in November was 72.9%, up 0.1 percentage points from the previous month. It rose 0.4 percentage points compared to the same month last year.