The Average Operating Rate of Small and Medium Manufacturing Industries in May Increased by 1.3 Percentage Points Compared to the Previous Month
The Small and Medium Business (SMB) Business Outlook Index fell by 1.4 points in July compared to the previous month. Although it had slightly risen in June, it recorded a downward trend again. The business outlook for small and medium enterprises has deteriorated once more. The Korea Federation of SMEs announced the results of the 'July 2024 Small and Medium Business Outlook Survey' conducted on 3,067 small and medium enterprises on the 27th.
The Business Outlook Index (SBHI) for July was surveyed at 78.0, down 1.1 points compared to the same period last year. If the index is above 100, it means that more companies have a positive outlook on the economy than those who do not, and if it is below 100, it means the opposite.
The manufacturing sector's business outlook for July fell by 0.9 points from the previous month to 83.3, while the non-manufacturing sector dropped by 1.7 points to 75.7. The construction industry (76.4) decreased by 2.9 points compared to the previous month, and the service industry (75.6) fell by 1.4 points.
In manufacturing, eight industries rose compared to the previous month, centered on ▲Electronic components, computers, video, audio, and communication equipment (88.8→99.0·up 10.2 points) and ▲Beverages (98.9→103.4·up 4.5 points). Thirteen industries, including ▲Other transportation equipment (93.7→86.3·down 7.4 points) and ▲Medical substances and pharmaceuticals (92.0→86.2·down 5.8 points), declined compared to the previous month, while two industries, ▲Leather bags and shoes (80.5) and ▲Furniture (68.7), remained stable.
In non-manufacturing, the construction industry (79.3→76.4) fell by 2.9 points compared to the previous month, and the service industry (77.0→75.6) dropped by 1.4 points. Within the service industry, two sectors, ▲Educational services (84.2→89.6·up 5.4 points) and ▲Repair and other personal services (74.1→78.8·up 4.7 points), rose, but eight sectors, including ▲Arts, sports, and leisure-related services (85.4→77.0·down 8.4 points) and ▲Transportation (83.3→78.8·down 4.5 points), declined.
Looking at the outlook by item across all industries, exports (83.3→77.8), domestic sales (78.8→77.3), operating profit (76.7→75.3), and financial conditions (77.7→77.1) declined. The employment level (94.4→95.0), which is a counter-trend indicator, is also expected to worsen compared to the previous month.
The most significant management difficulty for small and medium enterprises in June was sluggish domestic demand (67.8%), followed by ▲rising labor costs (50.3%), ▲excessive competition among companies (35.8%), and ▲rising raw material prices (33.8%).
The average operating rate of small and medium manufacturing enterprises in May was 73.1%, up 1.3 percentage points from the previous month and 1.2 percentage points higher than the same month last year.
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