"Appropriate Government Response" Only 37.5%
More than half of the management innovation SMEs are suffering from changes in the international situation such as the Middle East conflict, and specifically, rising purchase prices of raw materials and products are the biggest obstacles.
On the 6th, the Main Biz Association (Korea Management Innovation Small and Medium Business Association) announced the results of the 'Small and Medium Business Management Environment Survey in response to changes in the international situation'. This is the result of a survey of 323 main Biz companies nationwide from May to June to understand the impact of changes in the external business environment, such as prolonged disputes in the Middle East, international raw material prices, energy costs, and exchange rate fluctuations, on corporate management.
As a result of the survey, 56.3% of companies responded that the management burden was high due to changes in the international situation, and the burden level averaged 62.2 out of 100. Only 8.4% of companies said both sales and operating profit increased, while 56.0% said they decreased. In particular, manufacturing (67.1%) and export companies (67.4%) said they felt a great burden on management, and the burden of petrochemical, electric, electronics, food and textile industries among manufacturing industries was more pronounced than that of other industries.
Companies cited "increased purchase prices of raw materials and goods" (64.1%) as the most affected factors, followed by an increase in energy costs (10.5%), exchange rate fluctuations (8.7%), and an increase in logistics costs (6.2%). Looking at the actual cost burden level, 42.8% of companies said that operating costs, such as purchasing raw materials and products and energy costs, accounted for more than 50% of sales, and 21.4% of them said operating costs were more than 70% of sales.
Stabilizing the supply and demand of raw materials and products and easing the price burden (39.6%) were the most needed government support by companies, followed by financial support (24.8%) and logistics cost and transportation support (11.5%). Meanwhile, only 37.5% of companies rated the government's response as appropriate. The perception of government policy was also only 52.1 points on average based on 100 points.
An official from the Main Biz Association said, "The change in the international situation is becoming a constant and structural risk that threatens the cost structure and profitability of small and medium-sized companies beyond temporary external shocks. It is necessary to expand policies that support the improvement of the management structure of companies, such as supplying crisis management manuals and consulting on diversification of customer and procurement, along with supporting the volatility of major operating costs, away from short-term funding-oriented policies."
