Companies gloomy about economy’s direction

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Companies gloomy about economy’s direction


The majority of Korean companies believe the country is entering an economic recession, a recent survey by a business lobbying group showed.

A poll released on Sunday by the Korea Employers Federation of 527 companies with at least five employees found that 94.3 percent agreed that the economy is slowing down. Only 4.1 percent said they didn’t know and just 1.6 percent disagreed with the idea.

The survey was conducted ahead of the Chuseok harvest holiday, which falls during the last week of this month, to see whether companies plan to give their employees incentives for the holiday.

The percentage of companies with 300 or more workers that agreed that the Korean economy was getting into a recession was lower than those with fewer employees. Of the bigger companies, 88.9 percent said the Korean economy is souring, while 95.8 percent of small companies said the same, indicating that smaller businesses are faring worse.

In regards to the situation ahead of Chuseok, a typical time in Korea to gauge the economic atmosphere, 43.1 percent of poll respondents said the situation was “aggravated,” followed by those who said it was “similar to last year” at 35.7 percent. Nearly 18 percent said that conditions had “worsened severely.” Only 3.3 percent said that the situation was better than a year ago.

The percentage of companies with plans to give out bonuses for Chuseok shrank 1.9 percentage points from a year earlier to 70.2 percent. Bigger companies are scaling back bonuses the most, as the portion of these companies giving bonuses dropped by 4.1 percentage points to 73.2 percent.

Per-capita bonus income increased compared to a year before, however. It rose 3.1 percent to 1,056,000 won ($940). The federation said that the cause was the rise in base salary at many businesses due to the minimum wage hike this year. Base salaries serve as the basis for bonus calculation.

The survey also found the average Chuseok holiday period for this year is 4.7 days, down 3.5 days from last year. Businesses with 300 or more employees will have an average of 4.9 days off, down 4.8 days year on year. Smaller companies have an average of 4.7 days off, down 3.1 from last year. Korea had an unprecedentedly lengthy Chuseok holiday last year, at an average of 8.2 days, which was dubbed a “golden holiday.”

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