Half of domestic medium-sized corporations have no investment plans for 2025, according to a survey.
The Korea Federation of Medium Enterprises noted in a survey conducted on the 21st involving 800 medium-sized corporations nationwide that 50.4% responded that they have "no investment plans." This figure represents an increase of 8.7 percentage points compared to the previous year. These corporations cited "uncertain market conditions" (38.2%) and "deteriorating business performance" (19.6%) as reasons.
Among the 49.6% that indicated they have investment plans, only 41.5% stated they would increase their investment size compared to the previous year. Responses indicating they would "maintain текущего уровня" (35.8%) and "reduce it" (22.7%) accounted for more than half at 58.5%.
Medium-sized corporations anticipating a decrease in investment identified factors such as "weak domestic market" (40.0%), "concern over economic downturn" (24.4%), "increased production expenses" (10.0%), and "high interest rates and funding difficulties" (7.8%) as the main reasons.
Corporations planning to reduce investments cited "weak domestic market" (40.0%), "concern over economic downturn" (24.4%), "increased production expenses" (10.0%), and "high interest rates and funding difficulties" (7.8%) as the main reasons. Those planning to increase investments mentioned "expansion of core businesses" (35.7%), "strengthening entry into new businesses" (26.7%), and "expansion into overseas markets" (17.0%) as their reasons.
In addition, medium-sized corporations responded that they would concentrate their investments domestically in 2025. The survey results indicated that overseas investment accounted for only 19.6%, while domestic facility investment and domestic research and development (R&D) investments reached 70.0% and 37.0%, respectively. The purposes of investment included "renovation and improvement of existing facilities" (33.8%), "new and expansion of factories" (20.1%), "R&D investment" (19.9%), "environmental and ESG investment" (7.3%), and "digital transformation investment" (6.8%).
Policy measures to drive the expansion of medium-sized corporation investments included "expanding tax support" (38.0%), "stabilizing prices and activating domestic demand" (21.6%), "lowering interest rates" (20.1%), "strengthening policy financing" (8.5%), and "improving management environments such as labor" (8.5%).
Lee Ho-jun, vice president of the Korea Federation of Medium Enterprises, said, "Smooth funding is essential to promote investment expansion among medium-sized corporations," adding, "We will do our best to drastically lower the threshold for policy financing, which stands at a chronic imbalance of 1.6% for policy financing and 52.9% for internal funds. Alongside, we will urgently improve the legal and institutional environment, including labor, environment, and tax policies, to effectively enhance the long-term investment capacity of medium-sized corporations."