▲ Lease Notice
An analysis has shown that the business performance of self-employed individuals, including sales and net profits, significantly worsened last year.
According to a survey conducted by the Korea Economic Association through Mono Research from the 20th of last month to the 7th of this month, 500 self-employed individuals were surveyed. The results indicated that respondents’ net profits decreased by 13.3% compared to the previous year.
The average change in net profit was calculated arithmetically from the responses, with 72.0% indicating a decrease and 28.0% reporting an increase.
Regarding sales, 72.6% of respondents reported a decrease from the previous year, with the average fluctuation being -12.8%.
This year, 62.2% and 61.2% of respondents anticipated a decline in net profits and sales, respectively.
The expected decrease was 7.2% for net profits and 6.5% for sales.
The largest burdens for self-employed individuals were the cost of raw materials, labor costs, rent, and principal and interest on loans.
The average loan amount was 120 million won, with a monthly interest of 843,000 won and an annual interest rate of 8.4%.
Considering the average bank loan interest rate at 4.7% and small loan rates at 6.9%, the Korea Economic Association estimated that a significant number of self-employed individuals also borrowed from non-bank financial institutions.
Regarding questions about business closures, 43.6% of respondents stated they were considering shutting down within the next three years.
Reasons for considering closure included ongoing poor business performance, unclear economic recovery prospects, worsening financial conditions, loan repayment burdens, rising rent and labor costs, and increased raw material prices.
The outlook on when the economy might recover was mostly in the latter half of this year, the first half of next year, or the latter half of the year after that, in that order.
Self-employed individuals stated that necessary government measures include expanding financial support such as loan repayment deferments, enhancing consumption promotion plans, stabilizing prices of raw materials and goods, strengthening rent support, and curbing or reducing public utility rate increases.
Lee Sang-ho, the head of the Economic and Industrial Headquarters at the Korea Economic Association, remarked, “As domestic demand freezes, worries among countless self-employed are deepening,” and emphasized, “We need to reinforce financial support and enhance strategies to stabilize raw material prices and promote consumption.”
This survey was conducted with 500 self-employed individuals in industries such as restaurants, lodging, and retail through an online panel survey method, and the margin of error is ±4.38 percentage points at a 95% confidence level.
(Photo = Yonhap News)