Manufacturing Up 7.1%, Services Up 0.7%
Increase in Working Days, Early EV Subsidies Drive Growth
Retail Sales Down 0.7%
In February of this year, production in small and medium-sized manufacturing and service industries increased compared to the same month last year. This is attributed to factors such as an increase in the number of working days and the early disbursement of electric vehicle subsidies.
On April 29, the Korea Small Business Institute (KOSBI) published the April issue of "KOSI SME Trends," reporting that in February, production in small and medium-sized manufacturing increased by 7.1%, while production in small and medium-sized service industries rose by 0.7% year-on-year. The institute analyzed that the increase in manufacturing was influenced by a rise in the number of working days (+1.5 days) and the early payment of electric vehicle subsidies. The service sector saw growth mainly in wholesale and retail, finance, and insurance compared to the same month last year.
During the same period, retail sales amounted to 49.8 trillion won, a decrease of 0.7%. Retail sales of semi-durable goods such as clothing (-5.1%) and non-durable goods such as food and beverages (-5.1%) both declined. Unlike last year, when the Lunar New Year holiday fell in February, this year it was in January, and this shift in the holiday schedule is also considered to have had an impact.
In March of this year, the number of employees in small and medium-sized enterprises reached 25,305,000, an increase of 47,000 compared to the same month last year. By company size, the number of employees at companies with 1 to 4 workers increased by 23,000, while those at companies with 5 to 299 workers decreased by 24,000. The number of regular and temporary workers in SMEs increased by 71,000 and 138,000, respectively. However, the number of daily workers decreased by 97,000.
In February of this year, the number of newly established companies was 97,136, a decrease of 1.1% compared to the same month last year. By industry, the number of new companies in manufacturing (-0.8%) and services (-1.6%) declined, while construction (+5.0%) increased. The number of startups in technology-based industries rose by 5.8% year-on-year to 18,682, as the increase in knowledge-based service startups offset the decrease in manufacturing startups.
KOSBI stated, "In February of this year, the effects of an increase in working days and the shift in the holiday schedule coexisted, resulting in contrasting trends between production and sales indicators. However, with the Bank of Korea recently reporting a 0.2% decrease in real GDP for the first quarter and ongoing tariff disputes acting as downward factors, there are concerns that economic recovery may be constrained for the time being." The institute added, "Policymakers should continue to monitor the economic situation and implement policies to stimulate consumption among SMEs and small business owners in order to revitalize the domestic economy."
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