SME biz sentiment up for 2nd month for Sept. but still below par

South Korean smaller companies' business outlook improved for the second straight month in September, but still lags behind expectations, according to a recent poll. The survey of 3,060 small and mid-sized enterprises (SMEs) revealed that the Small Business Health Index (SBHI) for next month stood at 84.8, a 4.8-point increase from August.

This index had been growing for two consecutive months, rising from 80 in August to 84.8 in September. The index below 100 signifies that pessimism outweighs optimism. The SBHI for manufacturing sectors rose to 87.1 in September, up 7 points from the previous month, while nonmanufacturing companies' index increased by 3.7 points to 83.7.

Over half of the respondents cited sluggish sales as the most significant challenge to their management, followed by a rise in raw material costs (41 percent) and intense competition (31.4 percent). High labor costs also posed a concern for 27.8 percent of the respondents. The average capacity utilization rate of manufacturing SMEs was at 75.2 percent in July, a 0.7 percentage point decrease from the prior month, as indicated by the survey.