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More big businesses use subcontractors to cut costs: survey

All News 10:52 January 06, 2017

SEOUL, Jan. 6 (Yonhap) -- A growing number of big businesses are relying on outsourcing to reduce production costs amid a protracted economic slump, a survey showed Friday.

The ratio of subcontractors working solely for big businesses rose steadily to 14.8 percent in 2016 from 14.7 percent in 2015 and 14.2 percent in 2014, according to a survey of 8,000 subcontracting small and medium manufacturers with more than five employees by the Small and Medium Business Administration (SMBA) and the Korea Federation of SMEs (K-BIZ). The poll was conducted between May and September last year.

Of the surveyed subcontractors, 29.1 percent worked for both big and small businesses while 56.1 percent made goods for small and medium businesses alone.

About 44.3 percent of the subcontractors made intermediate goods while 34.6 percent manufactured end products.

The surveyed subcontractors made a total of 263 trillion won (US$221 billion) worth of products last year, up 8.2 percent from a year earlier.

Each subcontractor produced 4.1 billion won worth of goods on average last year, down 1.0 percent from the previous year.

A Yonhap file photo of K-BIZ (Yonhap)


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