Small Business Owners and Traditional Markets Feel Economic Downturn…”Due to Recession and Monsoon”

October 26, 2025
Noah
Economy
0

Major traditional market merchants in Seoul are announcing temporary closures during the summer vacation season.

The perceived economic conditions of small business owners and traditional markets worsened for the second consecutive month. The main causes were identified as reduced consumption due to the economic downturn and flood damage from the monsoon season.

According to a survey conducted by the Small Enterprise and Market Service from the 18th to the 22nd of last month, targeting 2,400 small business owners and 1,300 traditional market vendors, the July Business Sentiment Index (BSI) for small business owners was 57.3, down 6.6 points from the previous month. The July BSI for traditional markets was 40.7, a decrease of 10.2 points. A BSI above 100 indicates that more businesses feel the economy has improved, while a BSI below 100 means more businesses feel it has worsened.

The perceived BSI for small business owners was the lowest in five months since February (56.2). For traditional markets, it was the lowest in 16 months since March of last year (40.3).

Small business owners cited reduced consumption due to the economic downturn (32.2%) as the primary reason for worsening economic sentiment (multiple responses allowed). This was followed by seasonal factors such as weather and off-season periods (30.9%), monsoon and flood damage (24.5%), and decreased foot traffic and customers (18.3%).

Traditional market vendors also pointed to reduced consumption due to the economic downturn (33.2%) as the leading cause. They also identified monsoon and flood damage (30.8%), decreased foot traffic and customers (24.4%), and seasonal factors such as weather (23.9%) as reasons for the worsening economic sentiment.

By industry, the perceived BSI for small business owners declined compared to the previous month in most sectors: repair services (-12.5 points), personal services (-10.0 points), retail (-9.2 points), and manufacturing (-8.4 points). Only sports and entertainment-related businesses saw an increase (4.0 points).

For traditional markets, the largest declines were seen in household goods (-19.1 points), processed foods (-17.6 points), agricultural products (-11.3 points), and seafood (-10.9 points).

However, the August outlook BSI for both small business owners and traditional markets improved simultaneously for the first time in five months. The August outlook BSI for small business owners rose 9.9 points to 83.6 compared to the previous month. Traditional markets increased by 5.5 points to 62.0. This marks the first joint increase since March. As reasons for economic improvement (multiple responses allowed), small business owners cited seasonal factors such as school vacations and weather (34.5%) and the end of the monsoon season (23.2%). Traditional markets pointed to the end of the monsoon season (30.1%) and seasonal factors such as weather (29.1%).