The business outlook for small and midsize companies in December fell slightly after a month. Both manufacturing and nonmanufacturing showed a deterioration in sentiment.
The Korea Federation of Small and Medium Enterprises announced on the 27th the results of the "December 2025 SME business outlook survey," conducted on 3,088 small and midsize companies from on the 12th to the 18th. According to the survey, the December business outlook index (SBHI) was 76.5, down 1.0 point from the previous month. However, it rose 3.9 points from the same month last year.
By industry, the manufacturing outlook fell 2.4 points from the previous month to 80.6. Nonmanufacturing fell 0.4 point to 74.7. Within nonmanufacturing, construction (71.8) rose 3.2 points, while services (75.3) fell 1.2 points.
In manufacturing, 10 industries, including electronic components, computers, video, audio and communications equipment, and other transport equipment, showed an upward trend. By contrast, 13 industries, including industrial machinery and equipment repair and primary metals, saw their outlook worsen.
In nonmanufacturing, construction improved, while services declined, showing a divergence by industry.
Looking at the detailed items, ▲ exports (84.6→82.2) ▲ domestic sales (78.5→76.6) ▲ funding conditions (77.5→75.8) ▲ operating profit (75.5→74.3) all fell from the previous month. Only the employment outlook improved.
Compared with the average for the same period over the past three years, exports and raw materials improved in manufacturing, but the remaining items were expected to be worse than average. In nonmanufacturing, most items except exports were expected to fall below the three-year average.
The biggest difficulty cited by small and midsize companies was "sluggish sales (product sales)" (59.1%). That was followed by ▲ rising labor costs (32.5%) ▲ intensifying competition among companies (28.9%) ▲ rising raw material prices (28.8%).
Meanwhile, the average operating rate of small manufacturers in October was 70.3%, down 2.1 percentage points from the previous month and 1.6 percentage points from the same month a year earlier.