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Future outlook for self-employed people falls sharply: BOK data

The future consumer sentiment index for South Korea's self-employed entrepreneurs declined at a fast clip, a clear sign of the worries faced by small-scale business owners, data by the central bank showed Sunday.

The economic outlook CSI for self-employed people in the Bank of Korea's July report, stood at 79, compared to 91 for salaried workers in the country.

The findings gauge how economic actors view prospects for the next six months and can be used to check such factors as consumption, investment and employment.

Bank of Korea (Yonhap)
Bank of Korea (Yonhap)

A reading below 100 means pessimists outnumber optimists, while a reading above the benchmark means the opposite.

The BOK said this month's data is noteworthy because the 12-point gap between self-employed people and salaried workers is the widest since such numbers began to be collected in July 2008. The latest numbers are the lowest for both these groups since March and April of last year, respectively.

It said that while the future CSI for self-employed people stood at 90 in June's tally, it dropped 11 points in the one month period, outpacing the 9 point loss for salaried employees.

In regards to the present condition CSI, that checks how people perceive their economic situation compared with six months ago, the number for self-employed stood at 85 vis-a-vis 95 for salaried workers.

The BOK said that as a rule, self-employed business owners, such as those that run convenience stores and small eateries, are generally more sensitive to changes in the economy and become jittery about any perceived downturns.

 It then said the latest drop in CSI numbers for small business people may be linked to a rise in the minimum wage, rent and excessive competition.

Small time businesses that have thin profit margins to begin with have strenuously objected to the 16.4 percent spike in legal wages this year and a further 10.9 percent gains in salaries they have to meet in 2019.

The downward slide in CSI numbers comes as there is a growing number of experts here who are claiming that the country's economy has peaked and is showing signs of slowing down.

Reflecting this, Seoul's Finance Minister, Kim Dong-yeon, recently said that policymakers are working on ways to help small time entrepreneurs overcome challenges and that some sort of master plan will be announced in August. (Yonhap)