SME Business Outlook for March Improves from Last Month... Manufacturing Up 7.2 Points

March business outlook index rises 3.0 points to 82.5

The business outlook for small and medium-sized enterprises (SMEs) for next month has improved compared with this month. The outlook has improved mainly in the manufacturing sector.

On the 26th, the Korea Federation of SMEs announced the results of its "SME Business Survey for March 2026," stating that the Small Business Health Index (SBHI) for business conditions in March recorded 82.5, up 3.0 points from the previous month. The survey was conducted from the 9th to the 13th of this month, targeting 2,908 SMEs.

The SBHI is an index derived from surveying SMEs on their assessment of current conditions and future prospects. A reading of 100 or higher means that more companies have a positive view of the business outlook, while a reading below 100 means that more companies have a negative view.

The manufacturing sector came in at 88.1, up 7.2 points from the previous month. The non-manufacturing sector rose 1.2 points from the previous month to 80.0. The construction sector (70.3) climbed 3.3 points from the previous month, and the service sector (81.9) increased by 0.7 points.

Within manufacturing, 16 industries saw an increase, led by ▲industrial machinery and equipment repair (72.2→97.2) and ▲rubber and plastic products (66.1→86.6). In contrast, 7 industries, including ▲furniture (88.3→81.1) and ▲beverages (94.0→87.2), declined compared with the previous month.

In the non-manufacturing sector, construction (70.3) rose 3.3 points from the previous month, and services (81.9) increased 0.7 points from the previous month.

In the service sector, 8 industries, including ▲arts, sports and leisure-related services (73.8→85.1) and ▲repair and other personal services (80.1→82.8), increased compared with the previous month. Two industries, ▲accommodation and food services (82.2) and ▲real estate (92.9→92.8), declined compared with the previous month.

By item across all industries, ▲exports (79.6→86.0) and ▲domestic sales (80.4→82.0) rose from the previous month. In contrast, ▲financing conditions (82.9→80.3) and ▲operating profit (78.8→77.4) fell from the previous month. Employment (97.1→97.4), which is an inverse series indicator, is expected to deteriorate compared with the previous month.

The most frequently cited management difficulty faced by SMEs was "sluggish sales (product sales)" at 55.7%. This was followed by ▲rising labor costs (36.6%) ▲intensifying competition between firms (32.1%) ▲and rising raw material prices (30.4%).

The average operating rate of small and medium-sized manufacturers in January was 73.8%, down 1.7 percentage points from the previous month. For small enterprises (73.2%), the rate fell by 3.2 percentage points, and for medium-sized enterprises (76.6%), it declined by 0.8 percentage points.