Venture Business Association Releases 3Q Venture ‘Business Survey Index’
– Business Performance Index at 89.9, a slight increase from the previous quarter
– 4Q Business Outlook Index hits 100, recovering the benchmark
[Seoul Economy] The indices related to market conditions and forecasts as perceived by venture companies show a continuous recovery trend, raising expectations for economic recovery this year. The improvement in domestic sales has been a significant factor, with the ICT and broadcasting services, as well as the computer, semiconductor, and electronic components industries, showing notable growth.
According to the 3rd quarter Business Survey Index (BSI) released by the Venture Business Association on the 29th, the business performance index for venture companies was 89.9, a slight 0.1 point increase from the previous quarter. This marks the second consecutive quarter of increase since recording a low of 78.6 in the first quarter. An index above 100 indicates an improvement in business conditions compared to the previous quarter, while an index below 100 indicates deterioration.
The Venture Business Association conducted a survey on 1,200 certified venture companies from August 19 to September 1 for this index announcement.
Of the companies that responded, 85.6% cited ‘improved domestic sales’ as the core reason for business improvement in the third quarter. Additionally, the ‘improvement in exports’ rose to 26.3%, a 7.9 percentage point increase from the previous quarter (18.4%). On the downside, 85.9% still pointed to ‘poor domestic sales’ as the major factor of business deterioration, although financial difficulties fell by 10.1 percentage points to 30.6% from the previous quarter’s 40.7%, indicating eased financial burdens for companies.
By industry, the business performance index for manufacturing was 88.2, a slight 0.7 point decline from the previous quarter’s 88.9, still below the benchmark of 100. In manufacturing, the medical and pharmaceutical sectors had a significant impact, dropping 9.1 points compared to the previous quarter (102). On the other hand, the service sector’s business performance index increased by 2.2 points to 91.8 from the previous quarter’s 89.6. Among the detailed sectors, information and communication & broadcasting services (102.1) saw a 10.8 point increase from the previous quarter, making it the only sub-sector to surpass the benchmark.
The business outlook index for venture companies in the 4th quarter recorded 100, recovering the benchmark for the first time in a year.
For the fourth quarter, 80.6% of venture companies anticipating ‘improvement’ cited ‘improved domestic sales’ as a primary reason, showcasing expectations for a recovery in domestic demand. This was followed by ‘strengthening technological competitiveness’ (29.0%) and ‘improved exports’ (22.9%). Conversely, 81.5% of the companies anticipating ‘deterioration’ flagged ‘poor domestic sales’ as the primary reason, with the response rate increasing for two consecutive quarters, indicating growing concerns over domestic contraction.
Both the manufacturing and service sectors recorded their highest outlook index this year, maintaining a steady positive trend. The business outlook index for manufacturing increased by 1.1 points to 97.5 from the previous quarter’s 96.4, marking three consecutive quarters of growth but still not reaching the benchmark of 100. Notably, the computer, semiconductor, and electronic components sectors were the only ones to exceed the benchmark with 101.6, continuing their positive trend. The service sector’s outlook index rose by 1.6 points to 103.6 from the previous quarter’s 102.0, leading the overall economic recovery trend.
Lee Jung-min, Secretary-General of the Venture Business Association, stated, “Recording the highest business performance and outlook indices of the year signifies that economic improvement is becoming more significant,” adding that, “The recovery of the business outlook index to the benchmark after a year significantly heightens expectations for venture business.” He also emphasized the need for continuous government and parliamentary support to restore and advance the overall vitality of the venture industry.