South Korean small and medium-sized enterprises (SMEs) are showing signs of a rebound from a downturn driven by the economic downturn. Consumer goods industries, including automobiles and cosmetics, are performing particularly well compared to other sectors, signaling an economic recovery.
According to an analysis of the second-quarter performance of listed SMEs by Woori Finance Research Institute, their combined sales totaled 9.2 trillion won ($6.92 billion), marking a 9 percent increase compared to the same period a year before. The sales growth had been on a downward trend for four consecutive quarters after recording a 29.2 percent growth in the first quarter of 2022, declining to 7.8 percent in the first quarter of 2023. The analysis covered 675 companies with annual revenues of less than 1 trillion won.
Although the SMEs recorded operating losses of 81.4 billion won in the same quarter, the loss itself has been reduced. Although the operating profit margin for the second quarter still stands at negative 0.9 percent, it also improved compared to the first quarter’s negative 3.4 percent.
“The SMEs have seemingly escaped from the trend of poor performance,” the research institute said, adding that they are likely to see a turnaround to profitability next year following the anticipated global economic recovery.
By Chae Jong-won and Chang Iou-chung
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