Small manufacturers log biggest output drop in 9 years, far more than big biz
  • 5 years ago
Data show Korea's smaller manufacturers, especially those in the auto parts and metal work sectors, are going through much tougher times than the bigger firms.
A big drop in output this year is pointing to a further slowdown in Asia's fourth largest economy.
Won Jung-hwan reports.
Data from Statistics Korea show production by smaller manufacturers was down in the first 9 months of this year... by 4-point-3 percent, due to a slump in automaking and shipbuilding.
It's the biggest drop since 2009, when production plunged by 8-point-8 percent amid the financial crisis.

And looking more closely, these smaller manufacturers with fewer than 300 employees have been hit far worse than big businesses, whose production fell for the first time in three years, but only by zero-point-4 percent.
Experts saying the gap between the big and small manufacturers is likely to widen, which is worrying, especially in key industries like cars and ships.

And as investment in the sector slows down, especially in smaller and newer manufacturers, Korea might miss a chance to boost employment.
According to data released Sunday by the Bank of Korea, startups in manufacturing tend to create more jobs in the long term than the service sector.
The report says a one percentage point rise in the founding of new manufacturing firms will bring about a 3-point-3 percentage point gain in employment over a 10-year period.
In particular, newly founded companies in the machinery and automobile sectors could push up the employment rate by 17 percentage points and possibly solve the country's unemployment problem.
Won Jung-hwan, Arirang News.
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