Seoul: South Korean smaller companies' business outlook rose for the second consecutive month for September but still remains below par, a poll showed Sunday.

According to Yonhap News Agency, the survey of 3,060 small and midsized enterprises (SMEs) revealed that the small business health index (SBHI) reached 84.8 for the upcoming month, marking an increase of 4.8 points from August. This marks the second consecutive month of improvement, as the index rose from 78.2 in July to 80 in August.

The SBHI, which signals a pessimistic outlook when below 100, indicates that the number of pessimists still outnumbers optimists regarding business conditions. The manufacturing sector's SBHI increased by 7 points to 87.1, while nonmanufacturing companies saw a rise of 3.7 points to 83.7 for September.

The survey highlighted sluggish sales as the primary concern for over 50 percent of the respondents, with rising raw material costs affecting 41 percent and intense competition impacting 31.4 percent. Additionally, high labor costs were noted as a significant issue for 27.8 percent of SMEs.

Furthermore, the average capacity utilization rate for manufacturing SMEs was recorded at 75.2 percent in July, a slight decrease of 0.7 percentage points from the previous month.