Capacity utilization of SMEs falls to record low in Dec.

SEOUL, Feb. 1 (Yonhap) -- Capacity utilization levels of small- and medium-sized
enterprises (SMEs) fell to record low levels in December as economic woes ate
into demand, a report by an industry umbrella group said Sunday.
The survey by the Korea Federation of Small and Medium Business (Kbiz) conducted
on 1,415 companies nationwide showed the average operational rate of factories at
64.1 percent, down 3 percentage points from the month before.
It said the numbers are the lowest since indicators were first compiled in March
2002.
"This is lower than the 66.6 percent tallied for September 2003, when the country
was struggling with the collapse of the credit card bubble that sent shock waves
throughout the financial sector and caused a sharp fall-off in consumption," a
Kbiz official said.
He added that the drop is worrisome since numbers may continue to head south in
the near future.
Capacity utilization, which measures the proportion of plants in use by a
company, stood at 71.1 percent in March 2008, but fell below 70 percent in June.
It steadily lost ground for nine straight months last year.
This is the second-longest downturn since the 10 straight months of weak numbers
tallied from October 2002 through July 2003.
The latest tally, meanwhile, showed only a quarter of companies polled, or 25.8
percent, had capacity utilization ratios exceeding the "normal" 80 percent mark.
In December 2007, the number stood at 44.1 percent.
Industry insiders said that such low numbers are troubling since SMEs make up 99
percent of all local companies and hire most of the workforce. These companies
also provide key parts and materials to large conglomerates and are key to the
country's competitiveness and growth.
yonngong@yna.co.kr
(END)