"Continued Sluggish Sales and Labor Cost Burden"
Economic Outlook Drops Despite Improved Financial Conditions
Small and medium-sized enterprises (SMEs) in Gwangju and Jeonnam have a negative outlook for the economy next month. Amid a marked slump in the manufacturing sector, they cited declining sales and labor cost burdens as their main business difficulties.
According to the "July 2025 Gwangju-Jeonnam SME Business Outlook Survey" released by the Gwangju-Jeonnam Regional Office of the Korea Federation of SMEs on the 26th, the business outlook index (SBHI) for July stood at 76.8, down 2.5 points from the previous month (79.3). This figure is similar to the national average (76.6) and 2 points lower than the same month last year (78.8). An outlook index above the baseline of 100 indicates that positive responses outnumber negative ones.
By region, Gwangju recorded 83.3, down 0.4 points from the previous month (83.7), while Jeonnam fell by 4.3 points from 75.4 to 71.1. By industry, the manufacturing sector plunged 9.6 points to 75.2 from the previous month's 84.8, while the non-manufacturing sector rose 5.8 points to 78.4 from 72.6.
By category, outlooks for domestic sales (77.1→71.8), exports (92.6→92.3), and operating profit (72.4→71.8) all declined. On the other hand, the outlook for financial conditions (70.5→74.2) and employment levels (96.9→95.5) is expected to improve slightly.
The main business difficulties cited by SMEs were sluggish sales at 54.0%, followed by rising labor costs (37.1%) and higher raw material prices (35.2%). The survey was conducted from the 11th to the 17th with 213 SMEs (109 in manufacturing and 104 in non-manufacturing) in the Gwangju and Jeonnam regions.
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