More than half of Korea’s mid-sized companies have no investment plans for 2026

(FOMEK)

More than half of South Korea’s mid-sized companies have not drawn up investment plans for this year due to prolonged market uncertainty, a survey showed on Wednesday.

The Federation of Middle Market Enterprises of Korea (FOMEK) surveyed 650 mid-sized companies from November 17 to 28, 2025, on their investment outlook for 2026.

Of those surveyed, 46.9 percent said they have investment plans for this year, while 53.1 percent said they do not.

Among companies without investment plans, the main reasons cited were operating in sectors where investment is unnecessary (34.2 percent), uncertain market conditions (28.7 percent), deteriorating business performance (20.9 percent), having already completed investments (9.3 percent), and the lack of new investment opportunities (4.9 percent).

Mid-sized companies in the manufacturing sector particularly pointed to uncertain market conditions (30.9 percent) and worsening business performance (29.3 percent), while non-manufacturing mid-sized companies cited operating in sectors where investment is unnecessary (44.6 percent) and uncertain market conditions (27.5 percent) as key factors.

Among the 46.9 percent companies that said they do have investment plans, 46.2 percent said they would increase investment from last year, 37.4 percent said they would maintain spending at last year’s level, and 16.4 percent said they would reduce investment.

Companies planning to cut investment cited weak domestic demand at 42 percent, concerns about an economic downturn at 24 percent, rising production costs at 16 percent, and high interest rates and financing difficulties at 8 percent.

Those planning to expand investment said the spending would go toward expanding core businesses (29.1 percent), upgrading or replacing aging facilities (22 percent), strengthening entry into new businesses (21.3 percent), and expanding overseas operations (20.6 percent).

To encourage greater investment by mid-sized companies, respondents called for expanded tax incentives (40.3 percent), price stability and stronger domestic demand (18.9 percent), interest rate cuts (15.8 percent), expanded policy financing (11.7 percent), improvements in the business environment, such as labor conditions (9.1 percent), and easing of investment-related regulations such as site requirements (3.5 percent).

The federation said that while uncertainty has dampened sentiment, policy efforts should focus on forward-looking support measures, including tax and financial assistance, to quickly translate remaining investment willingness into action.