S. Korea's small businesses concerned with weak demand: poll

SEOUL, March 23 (Yonhap) -- South Korea's smaller business entities are mainly concerned with weak demand that is making it hard for them to maintain normal operations, a poll conducted by a state-run think tank said Monday.

The survey by the Korea Institute for Industrial Economics and Trade (KIET)
showed 66.5 percent of small and medium-sized enterprises (SMEs) cited falling
orders as the main threat brought on by the current global economic slump.
This was followed by 18.0 percent of companies expressing concerns over liquidity
shortfalls and 10.0 percent worrying about profit margins.
Related to weak demand, over half of the SMEs that responded to the questionnaire
said they were concerned with the weak domestic economy, while just 14.5 percent
said they were troubled by overseas developments.
KIET added that 58.5 percent of companies said relations with large conglomerates
have deteriorated in recent months, with 95.7 percent of these firms saying such
developments are affecting operations.
"Many companies acknowledged that orders by large conglomerates have fallen off
with unit price of products edging down," a researcher said.
South Korea's conglomerates have started cutting back on spending and have taken
steps to enhance efficiency. This sometimes has resulted lowering prices for
components and parts they buy from suppliers.
The researcher said auto parts manufacturers, companies that provide components
to shipyards and those that make machinery have been hit the hardest.
SMEs make up 99 percent of all companies in South Korea and employ just under 90
percent of the workforce.