Venture Business Business Survey Index Falls Below Baseline in Q2... Positive Outlook for Q3

Venture Business Association, Business Survey Index (BSI) Investigation
Q2 Business Performance Index Increased but Performance Deteriorated
Q3 Business Outlook Index Expected to Improve at 109.4

The business performance index for venture companies in the second quarter stood at 92.0 points, still below the baseline of 100, but it is expected to improve in the third quarter.

The Korea Venture Business Association announced the results of the Venture Business Business Survey Index (BSI) on the 4th, which included this information. The business survey index quantifies the on-site economic sentiment, with 100 as the baseline; values above indicate growth, while those below indicate decline.

Business Performance and Outlook Trends by Industry [Data Provided by the Korea Venture Business Association]

According to the survey, the overall business performance index for venture companies in the second quarter was 92.0 points, up 10.6 points from the first quarter, but still below the baseline of 100, indicating a deterioration in performance. In the second quarter performance index, manufacturing showed a 13.5-point increase compared to the previous quarter, reflecting a greater improvement than the service sector.

The main factor for the economic downturn was 'sluggish domestic sales,' accounting for the highest response rate at 55.7%. This was followed by 'financial difficulties' (38.6%) and 'rising raw material costs' (20.3%).

On the other hand, the business outlook index for the third quarter was 109.4 points, with all venture industry sectors expecting an improvement in the economy. This is an increase of 0.8 points compared to the second quarter. Notably, general services (6.1 points) and advanced manufacturing (2.5 points) saw significant increases compared to the previous quarter.

Performance BSI by Detailed Items [Data provided by Venture Business Association]

In the detailed item survey, except for 'cost expenditure,' the second quarter business performance index generally rose compared to the previous quarter, while the third quarter outlook index decreased.

First, the second quarter management performance index was 90.5 points, up 7.6 points from the previous quarter. By category, 'productivity' was the highest at 96.6 points, and the largest increase compared to the previous quarter was in 'domestic sales,' which rose by 7.1 points. Conversely, the third quarter management outlook index was 104.6 points, down 4.4 points from the previous quarter. Among management outlooks, except for 'overseas sales' at 98.9 points, 'domestic sales' and 'productivity' all exceeded 100. However, all showed declines compared to the previous quarter.

Regarding financial conditions, the second quarter performance index was 85.5 points, and the third quarter outlook index was 9.4 points, both showing increases compared to the previous quarter. They rose by 9.4 points and 1.3 points, respectively. In particular, the loan performance index and investment attraction outlook index showed relatively large increases compared to the previous quarter.

The second quarter workforce situation performance index was 93.5 points, up 2.8 points from the previous quarter, but the third quarter outlook index was 98.0 points, down 2.6 points from the previous quarter. Among these, the IT/SW sector showed a significant increase of 6.4 points in the second quarter performance index and a 2.0-point rise in the third quarter outlook index.

In the cost expenditure category, the second quarter performance index was 77.9 points, down 3.9 points from the previous quarter, but the third quarter outlook index slightly increased to 80.6 points. The overall performance for cost expenditure showed the lowest figures compared to other category indices.

Detailed Item-by-Item Business Sentiment Index (BSI) Forecast [Data Provided by Venture Business Association]

Meanwhile, only 4.5% of venture companies reported having experience in attracting investment in the first half of this year. The investment plan for the second half stood at 19.1%. Notably, the service sector showed relatively higher figures than manufacturing in terms of investment attraction experience, failure experience, and investment plans for the second half.

Among the indicators examining innovation and growth activities, the 'R&D investment per employee' performance and outlook both fell below 100, recording a negative evaluation.