[Korea Federation of SMEs]
[Korea Federation of SMEs]

Manufacturing outlook climbs 7.0 points to 87.1; non-manufacturing up 3.7 points

Exports outlook rises 6.9 points to 94.2; domestic sales, operating profit, liquidity also improve

Average operating rate at small manufacturers hits 75.2% in July, down 0.7 percentage points from prior month

South Korea's small and medium-sized enterprise business outlook index for September rose 4.8 points from the previous month, though it remained below the benchmark of 100, according to a survey released Sunday.

The September Small Business Health Index (SBHI), published by the Korea Federation of SMEs, came in at 84.8, up from 80.0 in August. The survey was conducted from Aug. 12 to Aug. 19 among 3,060 small and medium-sized enterprises.

An SBHI reading above 100 indicates that more companies hold a positive business outlook than a negative one; a reading below 100 means pessimists outnumber optimists.

The manufacturing sector's September SBHI rose 7.0 points from the prior month to 87.1, while the non-manufacturing sector gained 3.7 points to 83.7. Within non-manufacturing, the service industry climbed 5.5 points from 81.8 to 87.3, while construction fell 5.4 points from 71.1 to 65.7.

Among the 23 manufacturing subsectors, 19 posted month-on-month gains. Non-metallic mineral products recorded the largest increase, jumping 17.2 points from 64.0 to 81.2, followed by beverages, which rose 16.0 points from 91.5 to 107.5. Medical substances and pharmaceuticals also climbed 15.2 points from 82.1 to 97.3.

On the downside, the industrial machinery and equipment repair sector fell 14.8 points from 91.0 to 76.2, while leather goods, bags and footwear dropped 7.6 points from 82.6 to 75.0.

In non-manufacturing, arts, sports and leisure-related services surged 22.8 points from 70.9 to 93.7, and wholesale and retail trade rose 7.2 points from 78.9 to 86.1. Transportation fell 2.7 points from 85.4 to 82.7, while accommodation and food services edged down 1.1 points from 87.4 to 86.3.

Among business cycle components, exports showed the sharpest improvement. The September exports SBHI rose 6.9 points from 87.3 to 94.2. Domestic sales gained 4.1 points from 79.7 to 83.8, operating profit rose 3.9 points from 77.6 to 81.5, and liquidity improved 1.9 points from 79.9 to 81.8.

Sluggish sales remained the top management challenge for small and medium-sized enterprises. In the August business difficulties survey, 52.4 percent of respondents cited weak product sales as their biggest concern. Rising raw materials prices followed at 41.0 percent, intensifying competition among businesses at 31.4 percent, and rising labor costs at 27.8 percent.


hong@heraldcorp.com