The small and midsize business economy showed diverging trends between manufacturing and services, with expense burdens growing on rising energy and raw material prices due to the Middle East war.
Korea SMEs & Startups Institute (KOSI) released the June 2026 issue of "KOSI SME trends" on the 29th, containing these details.
According to the report, in April this year, SME manufacturing output fell 0.9% from a year earlier due to weakness in automobiles and rubber and plastics. In contrast, SME services output rose 3.7%, led by professional, scientific and technical services and wholesale and retail, continuing its upward trend.
Retail sales that month were 55.8 trillion won, up 2.4% from a year earlier. Sales of durables (3.8%), semi-durables (6.9%) and nondurables (4.2%) all increased. However, as consumer sentiment cooled due to the aftermath of the Middle East war, the seasonally adjusted retail sales index fell from the previous month. The retail sales index is an indicator that shows consumption trends.
The number of employed people in May was 29.12 million, down 40,000 from a year earlier. At enterprises with 300 or more employees, employment increased by 58,000, but at enterprises with fewer than 300 employees, it fell by 98,000, a larger decline.
By size among enterprises with fewer than 300 employees, employment at enterprises with 1 to 4 employees was 10.177 million, up 133,000 from a year earlier, while employment at enterprises with 5 to 299 employees was 15.558 million, down 232,000. By industry, employment increased in health and social welfare services (169,000) and information and communications (38,000), but decreased in manufacturing (-142,000) and professional, scientific and technical services (-77,000).
The number of startup corporations in April was tallied at 98,216. That was down 3.5% from the same month last year. Manufacturing (-4.0%), services (-3.9%) and construction (-2.8%) all declined. In contrast, technology-based sector startups rose 14.5% to 20,699, showing a divergent trend from the overall decline in startups.
Korea SMEs & Startups Institute (KOSI) analyzed that rising energy and raw material prices due to the Middle East war are having a visible impact on the SME economy. It noted that there is a need to continue policy support to ease expense burdens.