South Korean smaller firms’ business outlook took a turn for the worse for April amid the country’s slowing economy, a poll showed Thursday.
The survey of 3,150 small and medium-sized enterprises (SMEs) showed the small business health index (SBHI) standing at 80.7 for next month, down 2.4 points from March.
It marks a turnaround from March’s first gain in five months amid eased coronavirus curbs. The index had been weakening on-month since November last year.
A reading below 100 indicates pessimists outnumber optimists. The survey was taken by the Korea Federation of SMEs from March 14-21.
The downturn came amid the country’s slumping exports and sluggish domestic demand. South Korea’s exports tumbled 7.5 percent on-year to US$50.1 billion in February, marking the fifth straight month of declines.
According to the findings, the SBHI for the manufacturing sector came to 86.3 for April, down 0.2 point from March, with that for nonmanufacturing companies falling by 3.2 points to 78.3
Some 62 percent of the respondents cited sluggish domestic demand as the biggest hurdle to their management, followed by high labor costs (53.6 percent), rising raw materials costs (41.6 percent) and cutthroat competition (31.1 percent).
The average capacity utilization rate of manufacturing SMEs amounted to 71.5 percent in February, up 1 percentage point from the prior month.
Source: Yonhap News Agency