Headline growth returns to 2.1%, but divergence between tech exports and domestic services signals deepening crisis

South Korean corporate revenue rebounded in the third quarter of 2025, growing 2.1% quarter-on-quarter and ending a contraction seen in the previous period, according to Bank of Korea (BOK) data released Wednesday. The recovery was driven primarily by the manufacturing sector, where revenue expanded 2.9% on the back of surging demand for electronic and communication equipment (+12.3%). However, the data reveals that while large conglomerates saw revenue grow 2.6% and operating profit margins jump to 6.6%, small- and medium-sized enterprises (SMEs) posted zero revenue growth and saw profitability deteriorate.

The divergence is most visible in operating profit margins, which reached a weighted average of 6.1% nationwide, up from 5.8% a year earlier. This aggregate improvement was propelled almost entirely by large corporations, whose margins surged 1.5 percentage points from the previous quarter. In contrast, SME operating profit margins fell to 4%, down from 5% in the second quarter and 4.8% a year ago. The non-manufacturing sector also struggled, with the service industry seeing profit margins slide to 4.9% from 6.6% a year prior, highlighting the uneven nature of the quarterly rebound.

South Korean corporate revenue rebounded in the third quarter of 2025, growing 2.1% quarter-on-quarter and ending a contraction seen in the previous period, according to Bank of Korea (BOK) data released Wednesday. The recovery was driven primarily by the manufacturing sector, where revenue expanded 2.9% on the back of surging demand for electronic and communication equipment (+12.3%). However, the data reveals that while large conglomerates saw revenue grow 2.6% and operating profit margins jump to 6.6%, small- and medium-sized enterprises (SMEs) posted zero revenue growth and saw profitability deteriorate.

The divergence is most visible in operating profit margins, which reached a weighted average of 6.1% nationwide, up from 5.8% a year earlier. This aggregate improvement was propelled almost entirely by large corporations, whose margins surged 1.5 percentage points from the previous quarter. In contrast, SME operating profit margins fell to 4%, down from 5% in the second quarter and 4.8% a year ago. The non-manufacturing sector also struggled, with the service industry seeing profit margins slide to 4.9% from 6.6% a year prior, highlighting the uneven nature of the quarterly rebound.

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