April 25, 2024

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More than 40 percent of South Korean manufacturing firms have plans to expand facility investments this year despite rising concerns over an economic slowdown, a central bank report showed on March 27.

According to the report by the Bank of Korea, 41.3 percent of 252 surveyed manufacturers said they are planning to expand their facilities this year, up from 32.1 percent tallied in the previous year’s poll.

The portion of companies that will reduce investment stood at 27.4 percent, up from 25.4 percent a year earlier, while 31.3 percent of respondents said they will not change their investment plans this year.

A combined 43.5 percent of large businesses answered they will invest more into facilities this year, along with 39.4 percent of small- and mid-sized firms.

By sector, nearly 60 percent of shipbuilders have stated aggressive investment plans for this year, followed by steelmakers and machinery manufacturers.

Among those that have expansionary plans, 26.9 percent will increase their facilities by 10 percent or more in 2019, and 46.2 percent will expand facility investment by 5 percent.

They said that their expansionary investment plans are based on a regular facility maintenance scheme, or aimed at developing new models, expanding exports and upgrading facilities.

Pessimistic firms, however, said economic uncertainties at home and abroad, weaker domestic demand and sluggish exports weighed heavily on their decision-making process.

By Ram Garikipati and newswires (ram@heraldcorp.com)