While large companies are recovering, centered around semiconductors, small and medium-sized companies are experiencing a recession on the level of the COVID-19 pandemic. As the domestic market continues to be sluggish, the number of “solo bosses” who work without employees has also decreased for 12 consecutive months.
According to Statistics Korea on the 18th, the average production index of manufacturing SMEs from January to July was tallied at 98.2. This means that if the production activities of manufacturing SMEs were 1 million in 2020, the base year, then 98.2 were achieved from January to July this year. The manufacturing SME production index from January to July rose to 100.7 in 2022, but decreased by 2.2% and 0.3% year-on-year, respectively, from last year (98.5). On the other hand, the production index of large manufacturing companies from January to July rose by 6.8% from 106.5 last year to 113.7 this year.
It is interpreted that SMEs are experiencing a pandemic-level recession due to the burden of interest due to high interest rates on top of the sluggish domestic demand-related business. In fact, the number of SMEs that reported net income of 0 won or less last year exceeded 400,000 for the first time, reaching 401,793. This is 41.6% of all SMEs (964,736), meaning that more than 4 out of 10 SMEs did not make any net income at all.
The self-employed, which supports the domestic economy, are also on a long decline. The number of self-employed people who do not employ employees last month was 4,306,000, down 64,000 from a year ago. This is the 12th consecutive month of decline since September of last year. This is the first time in five years that the number of self-employed people without employees has decreased for 12 consecutive months, since it decreased for 15 consecutive months from November 2017 to January 2019. The total number of self-employed people last month also decreased by 39,000 from a year ago to 5,745,000, showing a 7-month consecutive decline. However, the number of self-employed people with employees increased by 26,000 from a year ago to 1,439,000, increasing for the 5th consecutive month.
It is interpreted that many single business owners, who are considered vulnerable groups due to accumulated high interest rates and high prices, are being forced to close their businesses. According to data submitted by the Ministry of SMEs and Startups to the office of Rep. Heo Jong-sik of the Democratic Party of Korea, the yellow umbrella subsidy paid to small business owners due to business closures from January to July this year was 888.1 billion won, up 12.4% from a year ago. It is continuing to increase this year after exceeding 1 trillion won for the first time ever last year at 1.26 trillion won.
Sejong = Reporter Song Hye-mi [email protected]
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2024-09-19 03:48:42