The business sentiment felt by small and medium-sized enterprises rebounded for the first time in three months. However, with burdens such as sluggish sales and rising raw material prices continuing, the SME business outlook still remained below 80.
The Korea Federation of Small and Medium Enterprises announced on the 28th the results of the "June 2026 SME business outlook survey," conducted from on the 12th to the 18th on 3,061 small and medium-sized enterprises.
The June business outlook SBHI stood at 79.6, up 2.0 points (p) from the previous month. After falling 1.7p and 3.2p in April and May, respectively, when economic anxiety grew over concerns about a prolonged Middle East war, it rebounded for the first time in three months.
The SME business outlook index is a quantified survey of business conditions and outlooks as perceived by small and medium-sized enterprises; a reading above 100 indicates more positive outlooks. A reading below 100 means more negative outlooks.
By industry, the manufacturing outlook improved by a relatively large margin. The June manufacturing outlook index was 82.3, up 3.8p from the previous month. Non-manufacturing rose 1.1p to 78.4.
In manufacturing, the rubber and plastic products sector rose 12.7p from 63.7 to 76.4, showing the largest improvement. The electronic components, computers, video, audio and communications equipment sector also climbed 10.8p from 79.8 to 90.6. Outlooks improved in 16 sectors across all manufacturing. Printing and recorded media reproduction fell 7.1p from 67.7 to 60.6, and nonmetallic mineral products dropped 5.8p from 73.2 to 67.4. In seven manufacturing sectors, the outlook worsened from the previous month.
In non-manufacturing, construction rose 2.9p from 69.6 to 72.5. Services increased 0.8p from 78.8 to 79.6. Education services rose 6.2p from 85.2 to 91.4, and publishing, video, broadcasting and telecommunications, and information services climbed 5.4p from 90.3 to 95.7. Arts, sports and leisure-related services fell 9.3p from 96.7 to 87.4. Accommodation and food services also dropped 7.8p from 87.5 to 79.7.
By item across all industries, export, operating profit, and domestic sales outlooks rose from the previous month, while funding conditions and employment outlooks fell.
As major management difficulties cited by SMEs, sluggish sales were the most common at 50.8%. That was followed by rising raw material prices (48.4%), intensifying competition among companies (30.3%), and rising labor costs (24.7%).
Meanwhile, the average operating rate of small and medium-sized manufacturers in April was 75.5%, up 0.1 percentage point from the previous month.