Chuseok Optimism Peaks, but Small Businesses and Traditional Markets See Sharp Drop in Sentiment

KOSI Releases September 2026 Edition of "KOSI SME Trends"

Ahead of Chuseok, outlook for small business owners and traditional markets has reached its highest point of the year. However, despite these optimistic projections, the actual sentiment among business owners has deteriorated, and as both prices and delinquency rates on loans to small and medium-sized enterprises (SMEs) have risen, concerns about growing cost and funding burdens have intensified.

The Korea Small Business Institute (KOSI) announced these findings in the September 2026 edition of "KOSI SME Trends" on September 28.

The Business Survey Index (BSI) outlook for small business owners in September stood at 95.1, up 6.8 points from the same month last year, marking the year's highest point. The outlook BSI for traditional markets also reached a new annual high of 105.0, up 19.5 points from the previous year. Notably, the traditional market outlook BSI surpassed the baseline of 100 for the first time in three years. A BSI above 100 indicates economic improvement, while a figure below 100 suggests deterioration.

By sector, the outlook index for small business owners rose year-on-year in ▲personal services (up 12.3 points), ▲retail (up 10.1 points), and ▲repair (up 9.5 points). In the case of traditional markets, projections improved especially in Chuseok-related sectors such as ▲livestock products (up 33.0 points), ▲agricultural products (up 32.2 points), ▲seafood (up 26.4 points), and ▲processed foods (up 18.6 points).

Citizens are examining fruits at a traditional market ahead of Chuseok. Photo by Yonhap News.

In contrast, real business sentiment has worsened. The August BSI for small business owners was 60.6, down 11.7 points year-on-year. ▲Restaurants (down 19.4 points), ▲retail (down 18.2 points), ▲professional services (down 13.9 points), and ▲personal services (down 10.1 points) all declined compared to the previous year. Traditional market sentiment BSI dropped to 57.0 in August, a decrease of 18.6 points from a year earlier. ▲Household goods (down 30.3 points), ▲clothing and footwear (down 25.1 points), ▲livestock products (down 24.9 points), ▲agricultural products (down 19.4 points), and ▲seafood (down 19.2 points) all recorded year-on-year declines.

While weak business sentiment persists, prices continue to rise. In August, the consumer price index and producer price index rose by 3.1% and 7.9%, respectively, compared to the prior year. The delinquency rate on SME loans has also reversed course and begun to climb, raising further concerns about cost and funding burdens. As of the end of July, the SME loan delinquency rate was 0.91%, up 0.09 percentage points from the previous month. In August, outstanding SME loans at deposit banks reached 1,101.6 trillion won, an increase of 4.8 trillion won from the previous month.

An official from the Korea Small Business Institute stated, "There must be efforts to alleviate cost and funding burdens for small business owners and SMEs, so that the renewed expectations for economic recovery during the holiday season can translate into a real rebound in sales."

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