Seven out of 10 companies in Daegu reported that business conditions felt worse this Chuseok than a year ago, a survey showed.
According to the Daegu Chamber of Commerce and Industry on Sunday, 69.3 percent of respondents said business sentiment had "worsened" compared with last year's Chuseok, based on a survey of 445 local firms that drew 283 responses.
Only 6.7 percent said conditions had "improved," while 24.0 percent said they were "similar to last year."
The most commonly cited reason for the deterioration was sluggish domestic demand, at 50.2 percent, followed by rising raw material and parts prices (36.7 percent), a decline in exports and overseas demand (16.6 percent), the burden of high interest rates and other financing costs (7.8 percent), and rising labor costs (6.7 percent).
On cash flow, 62.1 percent said their financial situation had "worsened" compared with last Chuseok, while 32.9 percent said it was "similar" and 5.0 percent said it had "improved."
The leading cause of tighter cash flow was shrinking cash inflows due to falling sales, cited by 52.7 percent of respondents, followed by higher operating costs including raw materials and labor (37.8 percent) and the burden of loan interest and other financing costs (12.7 percent).
Some 42.0 percent of firms said they planned to pay Chuseok bonuses this year, down 4.4 percentage points from last year. Among those planning to pay bonuses, 85.7 percent said they would pay the same amount as last year, while 9.2 percent planned to reduce payments and 4.2 percent planned to increase them.
Regarding holiday schedules, 76.0 percent of companies said they would take four days off during the Chuseok break, followed by five days (12.7 percent), three days (5.3 percent) and six days (2.4 percent).
Looking ahead, 60.1 percent of respondents said they expected business conditions after Chuseok to remain similar to current levels, while 29.7 percent anticipated a further deterioration and 10.2 percent expected improvement.
"Since expectations for improved business conditions remain low even after Chuseok, effective support is needed to revive domestic demand and ease the burden of financing and operating costs," said Lee Sang-gil, standing vice chairman of the Daegu Chamber of Commerce and Industry.
kbj7653@heraldcorp.com
