A greater number of small and medium-size companies have reported declining performance from April to June compared with the same period a year ago, a government report said Thursday.

According to a report released by the Small and Medium Enterprise Agency, 55 percent of 17,457 companies surveyed said business went downhill during the second quarter this year compared with 1997. Only 5.6 percent of the firms said business picked up during the period, while 39.4 percent said conditions remained the same.

The EPA's diffusion index, determined by subtracting the percentage of companies whose business has deteriorated from those whose business has not, hit a record low of minus 49.4 for the second quarter of this year.

For the first time since the agency started the quarterly survey of 19,000 small and medium-size companies in 1980, the diffusion index has worsened on a year-on-year basis for eight straight quarters, the report says.

Amid a gloomy, widespread economic sentiment, the construction, manufacturing and service sectors have been hit the worst during the period, with the individual indexes for the latter two dropping to record lows. Companies that are downsizing their workforces have continued to outnumber those who are hiring, and the percentage of firms with surplus personnel surpassed those with shortages for the first time during the period.

Compared with January-March, however, the diffusion index has improved from minus 45.1 to minus 34.1, the report shows, indicating the trend may continue into the July-September period.