A survey found that small and midsize corporations view the economic outlook for the second half of this year more positively than in the first half. However, management burdens such as rising raw material prices and weak domestic demand remain high.
The Korea Federation of Small and Medium Enterprises announced on the 21st the results of the "Survey on management difficulties of small and midsize corporations and the economic outlook for the second half of 2026," conducted with 500 small and midsize corporations excluding microbusinesses.
In the results, corporations expecting a "deterioration" in the second-half outlook came to 37.0%, down 11.4 percentage points from the first half, while those forecasting an "improvement" were 12.8%, up 5.4 percentage points. It was analyzed that small and midsize corporations' expectations for a recovery improved slightly from the first half.
By detailed item, responses of "improvement" increased across sales, operating profit, and cash flow, reflecting expectations for better results in the second half. For factory operating rates, "improvement" responses fell somewhat, but "average" responses rose sharply. In level assessments as well, "average" responses accounted for around 80% in most items, indicating there was found to be no major change between the first and second halves.
As domestic management hurdles, "rising raw material prices" accounted for the largest share at 27.6%. That was followed by weak domestic demand (18.5%), higher labor costs (14.5%), and labor shortages (8.5%).
For external management hurdles as well, rising overseas raw material prices (23.6%) were cited most often. Increased exchange-rate volatility (16.9%), higher logistics costs (11.0%), and geopolitical instability (9.3%) followed. Most external risks other than rising overseas raw material prices were expected to ease somewhat compared with the first half.
As their top management strategy for the second half, small and midsize corporations chose "management risk control" (28.2%), including responses to exchange-rate and tariff risks. Retaining key personnel and strengthening capabilities and solidifying management were tallied at 24.2% and 23.8%, respectively.
Policies needed to boost small and midsize corporations' vitality were found to be easing tax burdens (19.9%), financial support (18.8%), and resolving labor shortages (15.0%).
Kim Hee-jung, head of the economic policy division at KBIZ, said, "Small and midsize corporations expect the second-half outlook to improve, if only slightly, compared with the first half, but domestic and external uncertainties, such as raw material prices and weak domestic demand, remain significant."
Kim added, "While easing management burdens through tax relief and financial support, which small and midsize corporations most urgently demand, there is an urgent need for meticulous policy support that encompasses boosting domestic demand and managing external volatility."