82% "Trump Does Not Help the Korean Economy"
About half of South Korean companies are expected to adopt austerity management next year, according to a survey. Only one in five companies planned to pursue expansion management. Additionally, 82% of companies predicted that the return of Donald Trump as U.S. president would have a negative impact on the Korean economy.
According to the "2025 Corporate Management Outlook Survey" released on the 1st by the Korea Employers Federation (KEF), among the 65.7% of companies that announced their management plans for next year, 49.7% said they would adopt an "austerity management" approach. The proportions choosing "status quo" and "expansion management" were 28.0% and 22.3%, respectively. KEF noted that the percentage of companies opting for austerity management was the highest since the 2019 survey.
Large companies appear to perceive the current economic downturn more seriously than small and medium-sized enterprises (SMEs). The rate of choosing austerity management was 61.0% for companies with 300 or more employees, 15.3 percentage points higher than the 45.7% for companies with fewer than 300 employees. The response rate for austerity management among companies with 300 or more employees was the highest in nine years since the 2016 survey.
The most common method of implementing austerity management was "company-wide cost reduction," at 66.7%. This was followed by "rationalization of workforce management" (52.6%) and "reduction of new investments" (25.6%).
Regarding investment plans for next year, "investment reduction" was the most common response at 39.5%. This was followed by "same level as this year" (35.0%) and "investment expansion" (25.5%). The proportion of companies planning to reduce investment was 58.5% among companies with 300 or more employees, 25.7 percentage points higher than the 32.8% among companies with fewer than 300 employees. For next year's hiring plans, responses were "same level as this year" at 44.6%, "reduction in hiring" at 36.9%, and "expansion of hiring" at 18.4%.
Companies predicted that the re-election of the U.S. president would not be favorable for the domestic economy. Regarding "the impact of the Trump administration policies to be launched in January next year on the Korean economy," 82% of respondent companies said, "The strengthening of protectionism will have a greater negative impact on our export-dependent economy." Only 7.5% of companies responded that "positive effects such as benefits from U.S.-China containment will have a greater positive impact on our economy."
The average forecast for South Korea's economic growth rate next year was 1.9%. The majority (59.8%) said that the domestic economic recovery would begin in "2026 or later."
This survey was recently conducted targeting CEOs and executives of 239 companies with 30 or more employees.
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