Business conditions for local small- and medium-size enterprises (SMEs) are becoming increasingly unfavourable with the local economy showing no signs of recovery.
According to the Korea Federation of Small and Medium Business (KFSB), mounting inventories are pulling down factory operation rates at small domestic manufacturers and the financial crunch is driving a number of firms into bankruptcy.
The KFSB said the average factory operating rate of SMEs stood at 69.5 per cent in April, the lowest since the 69.3 per cent rate recorded in May 1999. The SMEs factory-operating rate has declined for six consecutive months.
Owing to the declining operating rate, the number of firms hoping to sell idle production facilities and equipment has increased sharply. However, there are few buyers.
