The ongoing conflict in the Middle East has led to a decline in production and employment in the small manufacturing sector.
According to the June report from the Small and Medium Business Administration, small manufacturing output decreased by 0.9% in April compared to the same month last year, driven down by key sectors such as automotive and rubber and plastics.
In contrast, small service industries saw a 3.7% increase year-over-year, particularly in professional, scientific, and technical services as well as retail.
Retail sales reached 55.8 trillion won in April, marking a 2.4% increase from the previous year. Sales of semi-durable goods rose by 6.9%, non-durable goods by 4.2%, and durable goods by 3.8%. However, the retail sales index, seasonally adjusted, fell compared to the previous month due to the impact of the Middle East conflict.
Last month, employment in small businesses stood at 29.12 million, a decrease of 40,000 compared to the same month last year. Employment in companies with 300 or more employees increased by 58,000, while those with fewer than 300 employees saw a drop of 98,000.
By sector, health and social welfare services added 169,000 jobs, and information and communication sectors increased by 38,000. However, manufacturing lost 142,000 jobs, and professional, scientific, and technical services saw a decline of 77,000.
As of April, the number of newly established businesses was 98,216, down 3.5% from the same month last year. The manufacturing sector experienced the largest decline at 4.0%, followed by services at 3.9% and construction at 2.8%.
Earlier, the Small and Medium Business Administration reported in its May issue that exports were performing well. In the first quarter of this year, small business exports reached $29.77 billion, a 9.1% increase from the same period last year, driven by strong demand for key products such as cosmetics (up 21.3%) and semiconductors (up 55.6%).
The administration noted, "The rising costs of energy and raw materials due to the Middle East conflict are visibly impacting the small business economy," and emphasized the need for supportive policies, such as strengthening financial safety nets to alleviate the burden on small enterprises.
* This article has been translated by AI.
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