October SME Business Outlook at 83.3...Down 1.5 Points from Previous Month

Manufacturing Up 0.2 Points, Non-Manufacturing Down 2.3 Points

The business outlook for small and medium-sized enterprises (SMEs) in October declined compared to the previous month, as the non-manufacturing sector worsened. This marks a reversal to a downward trend for the first time in three months.

According to the "2026 October SME Business Outlook Survey" released by the Korea Federation of SMEs on September 29, the Small Business Health Index (SBHI) for October stood at 83.3, down 1.5 points from the previous month. The survey was conducted from September 10 to 16, with responses from 3,073 SMEs.

The Business Outlook Index measures SMEs’ perceptions of future business conditions, where a score of 100 or above indicates positive expectations outweigh negatives, while a score below 100 means more negative sentiment.

By sector, manufacturing recorded 87.3, up 0.2 points from the previous month, while non-manufacturing fell by 2.3 points to 81.4.

Within manufacturing, nine sectors, including furniture (up 14.3 points) and repair of industrial machinery and equipment (up 12.9 points), saw increases compared to the previous month. Fourteen sectors, such as beverages (down 31.7 points) and printing and reproduction of recorded media (down 8.9 points), recorded decreases.

In the non-manufacturing sector, construction rose by 4.1 points compared to the previous month, while services declined by 3.6 points.

Within the services sector, four industries, including transportation (up 9.2 points) and arts, sports, and leisure-related services (up 6.4 points), recorded increases, while six industries, such as educational services (down 6.0 points) and wholesale and retail (down 5.4 points), declined compared to the previous month.

Across all industries, the following items all declined compared to the previous month: ▲Exports 94.2→92.0 ▲Domestic sales 83.8→82.7 ▲Operating profit 81.5→80.5 ▲Financial conditions 81.8→80.9.

The biggest management challenge for SMEs in September was "sluggish sales (product sales)" at 54.7%. This was followed by ▲Rising raw material costs (38.8%) ▲Intensified competition among companies (33.5%) ▲Rising labor costs (28.2%).

The average operating rate for small and medium-sized manufacturing businesses in August was 74.6%, down 0.6 percentage points from the previous month.

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