58% of Daegu Companies Unable to Pay Chuseok Bonuses... 69.3% Report Worsened Business Sentiment

Daegu Chamber of Commerce and Industry’s Chuseok Business Survey
60% Expect Little Change After the Holiday

The Daegu Chamber of Commerce and Industry (Chairperson Park Yoon-kyung) recently released the results of its "Chuseok Economic Trend Survey" of 445 local companies on September 6. The survey was conducted from August 26 to August 27, with 283 companies responding.

According to the results, 69.3% of respondents said that the business climate this Chuseok feels "worse" compared to last year, meaning that 7 out of 10 local companies perceive conditions to have worsened from the previous year. In contrast, only 6.7% of companies said conditions have "improved," while 24.0% responded that they are "about the same as last year."

Only 42% of companies in the Daegu area plan to pay bonuses this Chuseok.

When asked for the reasons behind the deteriorating business sentiment, "sluggish domestic demand" was cited most frequently at 50.2%, followed by "rising raw material and component prices" (36.7%), "decline in exports and overseas demand" (16.6%), "burden of financial costs such as high interest rates" (7.8%), and "rising labor costs" (6.7%).

Financial conditions have also worsened significantly, with 62.1% of respondents saying their cash flow this Chuseok is "worse" than last year. This is much higher than the proportion who said it was "similar to last year" (32.9%) or "improved" (5.0%).

As for the primary reasons for deteriorating financial conditions, "reduced cash inflow due to falling sales" was cited most often at 52.7%, followed by "increases in operating expenses such as raw materials, components, and labor costs" (37.8%), and "burden of financial costs including loan interest" (12.7%).

This year, only 42.0% of companies plan to pay Chuseok bonuses, a decrease of 4.4 percentage points compared to last year's survey. Among companies planning to pay bonuses, 85.7% answered they would pay at the "same level as last year," followed by "reduced payment" (9.2%) and "increased payment" (4.2%).

Regarding Chuseok holiday leave, "4 days" was the most common response at 76.0%, followed by "5 days" (12.7%), "3 days" (5.3%), and "6 days" (2.4%). More than three-quarters of respondent companies plan to close for four days over Chuseok, and 16.2% will give employees five days or more off.

When asked about the economic outlook after Chuseok, the majority (60.1%) expected it to be "about the same as now," while 29.7% anticipated it would "worsen" and 10.2% predicted it would "improve." With the proportion expecting deterioration nearly three times that of those expecting improvement, local companies appear to believe that the current difficult business conditions are likely to persist for the foreseeable future, rather than expecting a quick recovery.

Lee Sanggil, Executive Vice Chairman of the Daegu Chamber of Commerce and Industry, stated, "Since expectations for a business environment improvement after Chuseok are not high, effective support measures are needed to boost domestic demand and ease financial and cost burdens."

This content was produced with the assistance of AI translation services.