Group 1 - The Business Sentiment Index (BSI) for South Korean companies is reported at 93.2 for September, indicating a pessimistic outlook as it remains below the baseline of 100 since April 2022, marking a record low [1] - The manufacturing sector's BSI is at 92.6, while the non-manufacturing sector is slightly better at 93.8, with several industries, including non-metallic materials and metal products, expected to remain sluggish [1] - The semiconductor industry has seen a significant decline, with the BSI for the "Electronics and Communication Equipment" sector dropping from 111.1 to 94.7, a decrease of 16.4 points [1] Group 2 - In the non-manufacturing sector, industries such as electricity, gas, and water (73.7), construction (83.7), and transportation and storage (95.5) are expected to continue underperforming [2] - Key economic indicators such as investment (90.6), domestic demand (91.7), and employment (93.2) are all in a low state, with the inventory index exceeding 100, indicating an oversupply [2] - A report from the Korea Chamber of Commerce highlights that 33.9% of companies cite "difficulties in financing" as their primary operational challenge, followed by tax rates (20.9%) and labor regulations (15.8%) [2] Group 3 - The decline in new business establishments in South Korea is attributed to weak consumer demand, poor restaurant industry performance, and a sluggish construction sector, with the accommodation and food services sector seeing a 14.7% year-on-year decrease [3] - The real estate sector has also experienced a 12.8% decline, while wholesale and retail sectors have contracted by 8.1% [3] - Conversely, the financial and insurance sectors have seen a 21.9% increase in new establishments, and professional and technical services have experienced a slight growth of 1.7% [3]

Core Insights - The overall business confidence among Hong Kong SMEs remains cautious despite a slight increase in the Composite Business Index to 43.8, reflecting the uncertain global economic outlook [1] - Three out of five sub-indices showed growth, specifically in "Business Conditions," "Profit Performance," and "Investment Intentions," while "Global Economy" and "Recruitment Intentions" declined [1] - The "Global Economy" sub-index fell to 24.9, nearing levels seen in Q2 2022, indicating increased challenges for Hong Kong SMEs due to global trade uncertainties [1] Investment Trends - Over 94% of surveyed Hong Kong SMEs plan to maintain or increase investments, with a focus on online marketing, e-commerce training, IT systems, R&D projects, and overall employee training [2] - The "Financial and Insurance" sector experienced the highest increase in the business index, while "Information and Communication," "Real Estate," and "Accommodation and Food Services" saw significant declines [2] Cost Expectations - The anticipated rise in material costs has slowed, with 54% of SMEs expecting increases, down three percentage points from the previous quarter [2] - The percentage of SMEs planning to raise employee salaries decreased by seven percentage points to 20%, and only 17% intend to increase product or service prices, down three percentage points [2] Future Business Strategies - Approximately 78% of SMEs have plans to adapt to current risks, primarily by increasing local customer bases and enhancing operational processes with AI/digital applications [4] - Nearly 29% of SMEs are considering expanding into other markets within the next three years, with a notable interest in mainland China and ASEAN regions [4][5] Support Initiatives - The Hong Kong Productivity Council has established "The Cradle Outbound Service Center" to provide comprehensive support for SMEs looking to expand overseas, addressing challenges in product, technology, and management exports [5]