Only 1 out of 10 domestic small and medium-sized enterprises (13.8%) forecast an improvement in the economy in the second half of this year.
The Korea Federation of Small and Medium Enterprises announced the results of the 'small and medium-sized enterprises management difficulties and 2025 second half economic outlook survey,' conducted from June 16 to 20 on 500 small and medium-sized enterprises, on July 2.
In the overall economic outlook for the second half of 2025, 13.8% responded that it would 'improve,' an increase of 6.2 percentage points from the 7.6% in the first half.
In the itemized economic outlook that indicates the operational situation of small and medium-sized enterprises, projections for the second half of this year showed improvements compared to the first half in ▲ sales (8.4%→14.8%) ▲ operating profit (8.4%→14.8%) ▲ financial conditions (6.2%→11.4%) ▲ factory operation rate (9.6%→10.4%).
In the reverse trend indicators, improvements were also projected for ▲ manpower levels (18.6%→13.6%) ▲ inventory levels (9.6%→8%) ▲ equipment levels (2.8%→1.2%).
Among the major management difficulties for 2025 (multiple responses), the highest was ▲ sluggish domestic demand (51.2%→49.8%), followed by ▲ rising raw material prices (43.6%→41%) ▲ increasing labor costs (39.6%→38.4%) ▲ difficulties in securing funding (21.4%→21.2%), indicating that the management difficulties in the second half are expected to ease somewhat compared to the first half.
Meanwhile, 9 out of 10 small and medium-sized enterprises (90%) responded that they expect the recovery of the domestic economy to be 'after 2026.' Of those, 54.4% said the economy would recover in 2026, and 35.6% in 2027. Only 10% expected recovery in the second half of 2025.
The top priority management strategies for the second half of 2025 were to enhance management efficiency such as expense reduction and restructuring (27.6%), followed by ▲ managing management risks (21.6%) ▲ maintaining and strengthening core personnel (17%) ▲ external growth (10%).
The most needed policies to boost the vitality of small and medium-sized enterprises (multiple responses) were ▲ tax burden relief (52.6%) ▲ financial support (45.8%) ▲ resolving labor shortages (28.4%) ▲ stabilizing raw material supply (26.2%).
Choo Moon-gap, head of the economic policy department of the Korea Federation of Small and Medium Enterprises, noted, 'The management outlook for small and medium-sized enterprises in the second half is expected to improve somewhat compared to the first half, but since sluggish domestic demand remains a major management difficulty, the government must continue to pursue medium- and short-term policies to invigorate domestic demand.' He added that the government should support the investment capabilities of small and medium-sized enterprises through measures such as expanding investment tax credits and strengthen policy support for alleviating labor shortages and stabilizing raw material supply to boost the vitality of small and medium-sized enterprises.