A survey found that 5 out of 10 small business owners and self-employed individuals in the country have suffered direct or indirect damage due to the recent state of emergency.
The Korea Federation of Small and Medium Enterprises announced on the 16th the results of an emergency survey conducted from Dec. 10 to 12 among 505 small business owners and self-employed individuals (248 from the food service industry and 257 from the accommodation sector) regarding damages caused by the uncertainty of the domestic political situation.
According to the survey, 46.9% of small business owners and self-employed individuals responded that they suffered direct or indirect damage, such as cancellations of group reservations, due to the uncertainty of the domestic political situation in December. Major damage cases included cancellations of year-end group dinners (food service) and inquiries about safety and cancellations of guest stays (accommodation).
Additionally, 46.6% of small business owners and self-employed individuals responded that while they have not yet experienced damage, they believe there is a possibility of it occurring in the future, while 53.4% responded that there is no possibility.
When asked how long they expect the current uncertainty in the domestic economy to last, 40.4% answered '1 to 2 years,' followed by 30.1% for 'within 6 months,' 17.8% for '2 years or more,' and 6.1% for 'only until this year.'
In response to a question about efforts to improve the management environment in order to overcome the crisis, 60.4% said 'cost reduction, restructuring, etc.' was the most common approach, followed by 'strengthening promotions, etc.' (11.3%), 'expanding sources of management funds' (8.7%), and 'seeking to diversify business' (3.2%); however, 16.4% also indicated 'no improvement efforts.'
When comparing management conditions this year to last year, 83.6% rated it as 'difficult,' while 14.0% said 'similar,' and only 2.4% reported 'smooth.'
The reasons for the difficult management conditions this year (multiple responses) included 'decrease in sales' at 74.6%, 'increase in materials and supplies costs' at 41.0%, 'increase in labor costs' at 40.8%, and 'high interest rates' at 34.8%, with the ongoing domestic economic slump and high inflation rates being the primary causes.
Chumun Gap, head of the Economic Policy Division at the Korea Federation of Small and Medium Enterprises, noted, 'This is a situation where even the expectations of small business owners and self-employed individuals who were looking forward to the year-end special business have collapsed,' and emphasized that 'the National Assembly, government, and small and medium enterprises sector must work together to prepare measures for the recovery of domestic demand.'