April 23, 2024

• 

[THE INVESTOR] South Korea’s corporate investments are estimated to have declined 0.8 percent this year mainly due to a drop among small businesses amid slower growth, sluggish exports and oversupply in some industries, a report showed on Dec. 12.

The state-run policy lender Korea Development Bank’s survey on 3,550 companies showed that the combined volume of their investments fell to 179.4 trillion won ($153.5 billion) this year.

Investments by conglomerates rose 2.1 percent, but that by small and medium-sized companies plunged 13.6 percent compared to the previous year, the report said.

The manufacturing sector saw corporate investments increase by 1.7 percent but investments by the nonmanufacturing sector fell 3 percent over the same period.

In 2017, investments by big companies are expected to rise by 0.1 percent to reach 179.4 trillion won, the KDB said.

However, SMEs plan to largely cut down on their investments by 13.2 percent next year, it said.

By sector, the semiconductor, display and petrochemical industries are expected to boost investments in prospective businesses, but auto and steelmakers will cut spending due to oversupply and sluggish demand.

While the global economy is expected to perform better than the domestic economy next year, facility investments by export-dependent manufacturers will increase, the bank said. However, weak consumer sentiment, worsened by restructuring, household debt and political uncertainty, will hit investments by domestic demand-driven companies, it said.

By Kim Yoon-mi/The Korea Herald (yoonmi@heraldcorp.com)