Small and medium-sized enterprises are reported to have a negative outlook for August.
The Korea Federation of Small and Medium Enterprises conducted a survey, called the '2025 August Small and Medium Enterprises Business Outlook Survey,' targeting 3,082 small and medium-sized enterprises from July 11 to 17. The Small and Medium Enterprises Business Outlook Index (SBHI) for August stands at 74.6, a decline of 2 points compared to both the previous month and the same month last year.
The Small and Medium Enterprises Business Outlook Index is a quantification of the current economic sentiment and business outlook through surveys of small and medium-sized enterprises. A score above 100 indicates that business owners view the economy positively, while a score below 100 indicates a negative outlook.
In the manufacturing sector, the outlook for August is 76.7, down 2.2 points from the previous month (78.9), while the non-manufacturing sector is at 73.7, down 2.0 points from the previous month (75.7).
By industry, in manufacturing, five sectors showed an increase compared to the previous month, led by ▲metal processing products (73.5→82.6, up 9.1 points) and ▲electronic components, computers, video, sound, and communication equipment (80.2→83.9, up 3.7 points), while 18 sectors, including ▲beverages (91.5→76.4, down 15.1 points) and ▲rubber and plastic products (83.7→74.5, down 9.2 points), saw a decline.
In non-manufacturing, the construction sector (71.5→69.5) dropped 2.0 points compared to the previous month, and the service sector (76.5→74.5) also fell by 2.0 points. Within the service sector, four industries saw an increase compared to the previous month, including ▲education services (86.1→89.2, up 3.1 points) and ▲repair and other personal services (73.9→77.0, up 3.1 points), while six industries, including ▲accommodation and food services (85.0→80.3, down 4.7 points) and ▲professional, scientific, and technical services (85.1→81.6, down 3.5 points), experienced a decline.
By item, ▲exports (87.1→78.2), ▲domestic sales (74.7→72.8), ▲financial conditions (76.3→74.4), and ▲operating profit (73.4→72.2) all fell compared to the previous month. The reverse trend in employment (96.5→98.5) is also projected to worsen compared to the previous month.
In July, the major business challenges for small and medium-sized enterprises were led by 'poor sales (product sales)' (61.3%), followed by ▲increased labor costs (35.2%), ▲rising prices of materials and supplies (25.9%), and ▲intensified competition among companies (25.1%).
In June 2025, the average operating rate of small manufacturing enterprises was 70.9%, down 0.1 percentage points from the previous month and down 0.8 percentage points from the same month last year. By corporate size, small corporations (67.1%→67.9%) saw an increase of 0.8 percentage points compared to the previous month, while medium corporations (75.4%→74.3%) experienced a decrease of 1.1 percentage points compared to the previous month.