Korea Federation of SMEs "SME Business Outlook Survey"
Both Manufacturing and Non-Manufacturing Sectors Decline Together
Export, Domestic Demand, and Financial Outlook All Worsen
More Than 61% Cite "Sluggish Sales" as a Major Concern
The business sentiment among small and medium-sized enterprises (SMEs) deteriorated again in August.
According to the "August 2025 SME Business Outlook Survey" conducted by the Korea Federation of SMEs on 3,082 SMEs between July 11 and July 17, the Small Business Health Index (SBHI) stood at 74.6, down 2.0 points from the previous month and 2.0 points from the same month last year.
The August business outlook for the manufacturing sector was 76.7, a decrease of 2.2 points from the previous month. The non-manufacturing sector recorded 73.7, down 2.0 points from the previous month. Within the non-manufacturing sector, both the construction industry (69.5) and the service industry (74.5) dropped by 2.0 points each, showing an overall downward trend.
By industry, among manufacturers, five sectors improved, including ▲fabricated metal products (up 9.1 points) and ▲electronic components, computers, video, and telecommunications equipment (up 3.7 points). However, 18 sectors underperformed, such as ▲beverages (down 15.1 points) and ▲rubber and plastic products (down 9.2 points). In the service sector, ▲education services (up 3.1 points) and ▲repair and other personal services (up 3.1 points) increased, but six sectors declined, including ▲accommodation and food services (down 4.7 points) and ▲professional, scientific, and technical services (down 3.5 points).
Compared to the three-year average for August, all items in the manufacturing sector, except for "raw materials," and all items in the non-manufacturing sector are expected to perform worse than the average.
In July, the most significant management challenge was "sluggish sales (product sales)," cited by 61.3% of respondents, followed by ▲rising labor costs (35.2%), ▲increases in raw material prices (25.9%), and ▲intensifying competition among companies (25.1%).
The average operating rate of small and medium-sized manufacturers in the previous month was 70.9%, down 0.1 percentage points from the previous month and 0.8 percentage points from the same month last year. By company size, small enterprises (67.9%) rose by 0.8 percentage points, while medium-sized enterprises (74.3%) fell by 1.1 percentage points. By type, general manufacturing remained steady at 70.0%, while innovative manufacturing dropped by 0.4 percentage points to 73.2%.
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