🚨 Election Boom: Political Season and Economic Expectations

Today Korean Social News | 2025.06.05

📌 "No Election Boom Either"…Small Business Owners' Growing Sighs

💬 In the first quarter of 2025, small business owners' average sales decreased by 0.72% compared to the previous year and 12.89% compared to the previous quarter. With high interest rates, economic recession, and political instability combined, consumer sentiment is shrinking, and small business owners are not even feeling the 'election boom' effect that they usually expect. As loan repayment burdens increase and closure rates rise, the situation for small business owners struggling to make a living is getting worse. In particular, restaurants and accommodation businesses that used to expect sales increases from politicians' local activities during election seasons are showing completely different patterns this time.

Summary

• Election boom is a temporary increase in consumption due to political activities during election periods.
• Sales increase effects appear in specific industries such as restaurants, accommodation, and printing.
• Currently, the traditional election boom effect is greatly weakened due to economic recession.

1️⃣ Definition

Election boom means an economic phenomenon where certain industries or regions experience temporary sales increases due to political activities and election-related consumption during election periods. Simply put, it's when various industries do better business than usual during political seasons.

This is mainly caused by increased consumption from election campaigns, various rallies, politicians' local activities, and production of election-related materials.

💡 Why is it important?

• It provides small business owners with an opportunity to temporarily ease difficult business situations.
• It can provide short-term help for local economic revitalization.
• It serves as an indicator showing economic atmosphere and consumer sentiment during election seasons.
• It allows us to confirm the direct impact of political activities on the economy.

2️⃣ How Election Boom Works and Main Industries

📕 Why Election Boom Happens

• Election boom occurs due to various factors. Main causes include:

  • Increased spending on transportation, accommodation, and meals due to politicians' regional tours and election campaigns.
  • Increased venue rental fees, food orders, and product purchases due to various rallies and events.
  • Increased printing industry sales due to production of election-related promotional materials (banners, posters, flyers, business cards, etc.).
  • Increased small business sales due to politicians' visits to local commercial areas and 'people's livelihood activities'.
  • Increased secondary consumption due to media and political personnel's regional coverage activities.

• Election season shows unique consumption patterns. Main characteristics include:

  • Restaurant usage increases as dinner parties and gatherings increase more than usual.
  • Temporary consumption surges occur due to political events and activities.
  • Symbolic consumption increases due to candidates' 'field visits' and 'common people activities'.
  • Accommodation and food businesses benefit as election-related workers stay longer in local areas.

📕 Main Industries Benefiting from Election Boom

• Election boom effects appear clearly in specific industries. Main industries include:

  • Restaurant business: Sales increase due to various dinner parties, meetings, and dining gatherings with local figures.
  • Accommodation business: Hotel and motel usage increases as accommodation demand from election personnel from other regions grows.
  • Printing business: Sales surge dramatically due to bulk orders for election publications, banners, posters, business cards, and flyers.
  • Advertising business: Demand for various advertising and marketing services for election promotion increases.
  • Transportation business: Usage of transportation services increases due to election-related material transport and personnel movement.

• The degree of election boom varies by region. Regional characteristics include:

  • Election boom effects appear larger in competitive regions where candidates' activities are more active.
  • Election boom tends to be felt more in local small cities than in metropolitan areas.
  • Areas with tourist attractions or famous restaurants experience additional promotional effects due to higher frequency of politician visits.
  • Election boom effects are relatively more noticeable in rural areas with smaller constituencies and lower population density.

📕 Current Changes and Limitations of Election Boom

• Unlike the past, election boom effects are weakening. Main changes include:

  • Overall consumption shrinkage due to economic recession and high interest rates is offsetting election boom effects.
  • Demand for offline promotional materials is decreasing due to the spread of online election campaigns.
  • Large-scale rallies and gatherings have decreased as non-contact culture spread after COVID-19.
  • The election season atmosphere itself is not as good as before due to increased fatigue and indifference toward politics.

• There's a gap between reality as felt by small business owners. Current situation includes:

  • Small business owners' sales in the first quarter of 2025 decreased by 0.72% compared to the previous year and 12.89% compared to the previous quarter.
  • Due to high rent and rising labor costs, it's difficult to solve business difficulties with temporary sales increases alone.
  • As loan repayment burdens increase, continuous business stability has become more important than short-term sales increases.
  • As consumers' spending patterns changed to focus on necessities, dining out and optional consumption have greatly decreased.

Main Limitations and Problems of Election Boom

1. Temporary effect: A temporary phenomenon where sales return to original levels after elections end
2. Industry differences: Limited effects only in specific industries, not all industries benefit
3. Regional imbalance: Differences in election boom effects between competitive and non-competitive regions
4. Dependence on economic situation: Minimal election boom effects when overall economic conditions are bad
5. Excessive expectations: Structural business difficulties cannot be solved with election boom alone

3️⃣ History and Changes of Election Boom

✅ Representative Cases of Past Election Boom

• There were clear election boom effects in the past. Main cases include:

  • 1987 Presidential Election: Commercial area revitalization due to various rallies and campaigns along with democratization enthusiasm was notable.
  • 1997 Presidential Election: Even during the IMF economic crisis, consumption temporarily increased during election season.
  • 2002 Presidential Election: Various election events and promotional activities were active due to fierce competition between candidates.
  • 2017 Presidential Election: Election-related consumption increased greatly as political interest rose after candlelight rallies.

• Various special effects appeared by industry. Past main situations include:

  • The printing industry often saw sales increase 3-5 times the usual amount during election seasons.
  • Restaurants enjoyed both promotional effects and sales increases due to politicians' 'common people cosplay' visits.
  • Motels and inns in local small cities recorded 2-3 times higher occupancy rates than usual due to election personnel accommodation.
  • Taxi and rental car industries also experienced significant sales increases due to increased election-related transportation demand.

✅ Recent Election Boom Change Trends

• Structural changes due to digital transformation are occurring. Main changes include:

  • Traditional printed material demand has greatly decreased due to the spread of online election campaigns.
  • Online advertising companies have emerged as new beneficiary industries as digital marketing using SNS and YouTube has increased.
  • Video conference platforms and digital equipment companies' sales have increased as non-contact election campaigns have grown.
  • Small catering companies rather than large event companies are benefiting as small-scale meetings have increased instead of traditional street campaigns.

• Effect reduction due to economic situation changes is clear. Current trends include:

  • Consumer sentiment shrinkage due to high interest rates and inflation is offsetting election boom effects.
  • As small business owners' business difficulties have intensified, the felt effects are not significant with temporary sales increases alone.
  • The election season atmosphere itself is not as good as before due to the spread of political fatigue and cynicism.
  • Candidates also tend to reduce consumption spending compared to the past due to election cost reduction pressure.
  • Strengthened regulations due to election law amendments are also affecting the reduction of election-related consumption.

4️⃣ Related Term Explanations

🔎 Small Business

• Small business is economic activity where individuals directly operate businesses to maintain their livelihood.
• Small business refers to a form where individuals independently operate businesses based on capital and technology. It's economic activity where one becomes a business owner themselves rather than being employed by others to create profits.
• Main characteristics of small business include: First, management independence where all decisions about business operations are made by oneself. Second, direct responsibility for profits and losses. Third, one may employ workers or operate alone. Fourth, industries and scales are very diverse.
• South Korea has about 5.5 million small business owners, accounting for about 25% of all employed people, ranking high among OECD countries. Main industries include wholesale/retail, accommodation/food service, transportation, and real estate. Recently, the business environment for small business owners is very difficult due to economic recession, online shopping expansion, and rising rent.

🔎 Consumer Sentiment

• Consumer sentiment is the overall psychological state that consumers have toward consumption activities.
• Consumer sentiment refers to the psychological state that combines attitudes, intentions, and expectations that individuals or households have toward consumption spending. They show active or conservative attitudes toward consumption depending on economic conditions, personal income, and future prospects.
• Main components of consumer sentiment include: First, perception of current economic conditions. Second, evaluation of personal income and employment stability. Third, concerns about future economic prospects and price increases. Fourth, political stability and social atmosphere are also important factors.
• Consumer sentiment is measured through consumer confidence index, consumer price perception, and economic outlook surveys. When consumer sentiment shrinks, consumption spending decreases, which can lead to economic recession. Conversely, when consumer sentiment improves, it helps economic recovery. Currently, consumer sentiment is greatly shrunk due to high interest rates, inflation, and real estate market instability.

🔎 Economic Recession

• Economic recession is a state where economic activity shrinks and growth rates slow down or record negative numbers.
• Economic recession refers to an economic situation where the entire national economy's production, consumption, investment, and employment decrease, causing economic growth rates to slow down or record negative numbers. Generally, recording negative growth for two consecutive quarters is judged as economic recession.
• Main characteristics of economic recession include: First, GDP growth rate slowdown or negative growth appears. Second, unemployment rate increase and employment creation decrease occur. Third, corporate investment and personal consumption shrink. Fourth, prices fall or growth rates slow down.
• Causes of economic recession include financial crises, external shocks (pandemics, wars, etc.), monetary policy tightening, and real estate bubble collapse. Currently, the Korean economy has growing concerns about economic recession due to high interest rate policies, real estate market recession, and export sluggishness. The government is attempting economic stimulus through fiscal and monetary policies, but solving structural problems requires time.

5️⃣ Frequently Asked Questions (FAQ)

Q: How long does the election boom last?

A: The duration of election boom varies depending on the type of election and regional situation, but it generally appears centered around the official election campaign period from election announcement to election day. Presidential elections have about 22 days of official campaign period, and National Assembly elections have about 14 days, but considering preliminary candidate registration and coalition processes, it can actually last 1-2 months. Particularly for printing businesses, orders start flooding in before election campaigns begin for election publication production, and restaurants and accommodation businesses experience the most active boom during election campaign periods. However, sales generally return to original levels immediately after elections end, so small business owners try to maximize this period. Recently, traditional election boom periods are also shortening and effects are weakening due to online election campaign expansion and economic recession.

Q: Why are election boom effects not as good as before these days?

A: The recent weakening of election boom effects is due to several complex factors. First, traditional offline promotional material demand has greatly decreased as online election campaigns have spread due to economic structural changes. Second, large-scale rallies and gatherings have decreased as non-contact culture became established after COVID-19. Third, overall consumer sentiment shrinkage due to high interest rates and inflation is offsetting election boom effects. Fourth, the election season atmosphere itself is not as good as before due to increased political fatigue and indifference. Fifth, the felt effects are not significant with temporary sales increases alone as small business owners' structural business difficulties have intensified. Sixth, various regulation strengthening due to election law amendments is also constraining election-related consumption. Finally, candidates also tend to reduce consumption spending compared to the past due to election cost reduction pressure, so overall the scale and duration of election boom are shrinking.