South Korean small and medium-sized firms' business sentiment worsened for three consecutive months.

The Korea Federation of SMEs said on Sunday that its recent survey of three-thousand-150 small firms showed that the Small Business Health Index for January came to 80-point-nine, slipping for the third straight month.

The figure represents a drop of four-point-five points from the previous month and a decrease of three-point-four points from January this year.

The federation attributed the fall to the government's drastic economic and labor policies and a sluggish investment in production and facilities in the private sector.

The Small Business Health Index of lower than 100 indicates that the surveyed companies expect conditions to worsen in the coming month.