Small Firms Factory Operation Hits Record Low

The factory operating rate of South Korean small and medium enterprises tumbled to an all-time low in January as they took the brunt of a sagging economy, Yonhap News Agency reported Sunday, quoting a business organization.

Local small and mid-size companies operated at an average 62.6 percent of their capacity in January, down from 64.1 percent in December, according to the Korea Federation of Small and Medium Business.

The association said January's figure was the lowest since it started compiling related data in March 2002.

The average capacity utilization rate of smaller firms has been hovering below the 70-percent mark since March last year, when the figure reached 71.1 percent.

Local small and medium enterprises have been hit hard by the economy's slump which made a big dent in domestic demand and overseas shipments.

Buffeted by tumbling exports, the South Korean economy, Asia's fourth-largest, shrank 5.6 percent in the fourth quarter of last year, marking the worst annual drop since the first quarter of 1998.

South Korea recently forecast that its economy will contract 2 percent this year on faltering exports and anemic domestic demand, a sharp turnaround from an annual 2.5 percent gain in 2008.