Business Confidence Survey 2021 results – European Chambers in Korea
European chambers and business associations revealed “Business Confidence Survey 2021” on the business performance and outlook in Korea with 154 European CEOs.
Seoul, February 15, 2022 – European chambers in Korea including the European Chamber of Commerce in Korea, the French Korean Chamber of Commerce and Industry, the Korean-German Chamber of Commerce in Korea, and eight other European national chambers and business councils supported by Roland Berger Seoul, today released the results of annual “Business Confidence Survey 2021”.
The survey took place in January 2022 and 154 CEO/executives of European companies, representing over 50,000 employees and a total turnover of EUR 48.6 billion (equivalent to KRW 66.4 trillion), participated in the survey.
The survey showed the Korean market has become increasingly important for European companies’ global strategy since the start of the pandemic. As reported in the survey, 62% of the participants responded that ‘Korea is increasing in strategic importance’ while already for 2020, 51% of respondents reported the growing significance.
Overall, the business performance in 2021 showed improvement with positive economic development in Korea. The majority – 71% – of the survey participants responded that they were either ‘very content’ or ‘content’ with their business performance in Korea compared to 63% in 2020. 69% of respondents reported more than 5% higher sales than the previous year while 21% said they maintained a similar level. Profitability remained high with 84% of companies recording a positive EBIT (Earnings before interest and tax).
The business outlook for the next two years is positive. 60% of the respondents are willing to increase their investment and operational expenses in Korea, while only 6% forecast a reduction. In addition to the growing investment, 62% plan to increase their workforce while almost one-third plan to keep their current level.
On the other hand, 58% replied doing business in Korea has become more difficult over the last two years, and ‘legislative environment & regulations (63%)’ and ‘discretionary enforcement of regulations (54%) is widely considered to be the major challenges for European companies doing business in Korea. Also, 35% replied that reforms implemented by the government in 2020 did not help their business operation. The outlook for 2022 looks similar although there is less optimism but more scepticism as well as uncertainty.
The Korean-European trade has grown about 26.5% in 2021 amid the challenging global economic circumstances. While the economic development in Korea was positive, there are still a lot of areas to improve in terms of the business environment and regulations. The European chambers hope the survey serves as a useful tool for businesspeople and policymakers to make future-forward decisions for the mutual benefit of the Korean and European businesses.
Since 2014, the Business Confidence Survey has been conducted to take an annual snapshot of European companies’ perceptions towards the business environment in Korea. The company profile included various industries, diversely ranging from services to manufacturing to provide an unbiased viewpoint. About 75% of the participants are European companies that have been active in Korea for more than a decade.
You can directly access the results of the Business Confidence Survey 2021 on the following link: Business Confidence Survey 2021 or directly on the European Chamber of Commerce in Korea’s website.
