Korea Federation of SMEs Releases June Business Outlook Survey
Worsening Conditions in Both Manufacturing and Non-Manufacturing Sectors
April Factory Operating Rate Drops by 0.1 Percentage Points to 70.7%
The business sentiment among small and medium-sized enterprises (SMEs) turned downward again in June. Outlook for business conditions worsened, particularly in the manufacturing and construction sectors, and financial conditions are also expected to deteriorate.
According to the "June 2025 SME Business Outlook Survey" released by the Korea Federation of SMEs on May 29, the business outlook index (SBHI) for June stood at 75.0, down 0.7 points from the previous month. Compared to the same month last year (79.4), it fell by 4.4 points. After the SBHI showed an upward trend in March, it has now reversed to a decline for the first time in three months.
The business outlook for the manufacturing sector in June fell by 1.0 point from the previous month to 79.8, while the non-manufacturing sector dropped by 0.4 points to 73.0. Within manufacturing, eight industries?including medical, precision, optical instruments and watches, and beverages?rose compared to the previous month. In contrast, 15 industries?including electronic components, computers, visual, audio and telecommunications equipment?declined compared to the previous month.
In the non-manufacturing sector, construction (66.2) fell by 6.9 points from the previous month, while services (74.4) rose by 0.9 points. Within services, seven industries?including accommodation and food services, and transportation?rose compared to the previous month. On the other hand, three industries?including arts, sports and leisure-related services, and business facility management, business support, and rental services?declined compared to the previous month.
The outlook for financial conditions worsened, decreasing by 0.2 points compared to the previous month. However, the outlook for ▲exports, ▲domestic sales, and ▲operating profit improved compared to the previous month. The employment level, which is a reverse series trend (96.0→96.3), is expected to worsen compared to the previous month.
The main management difficulties faced by SMEs in May were led by "sluggish sales (product sales)" at 61.9%. This was followed by ▲rising labor costs (34.4%), ▲increases in raw material prices (29.3%), and ▲intensifying competition among companies (26.9%).
The average operating rate of small manufacturing businesses in April was 70.7%, down 0.1 percentage points from the previous month and 1.1 percentage points from the same month last year. By company size, small enterprises (67.3%→67.0%) saw a 0.3 percentage point decrease from the previous month, while medium-sized enterprises (74.6%→74.8%) increased by 0.2 percentage points.
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