"Shipbuilding-Motorcar, Uneasiness of Korean Won Increase"

Due to the continuous bearish tendency of US dollar and bullish tendency of Korean Won, the economy prospect of the second half of the year is discouraging.

According to industries and experts, if the bullish tendency of Korean Won is continued, owing to an inactivity of exports and worse profit of export industries of shipbuilding, motorcar, steel and textile, the industrial business of the second half of the year will become sluggish. However, such as IT and semiconductor, some industries which have the high world market share and technical competitiveness, have not received a severe blow. So, depending on the industries, it shows a clear contrast between light and shade.

According to the report of ‘Prospect of industrial activities in the bullish tendency of Korean Won for the second half of the year’ published by Hyundai Research Institute, “As the recent Korean Won rate has sharply increased, but the exchange rate of exports competitors such as China, Taiwan and Singapore hasn’t changed, the export competitiveness and the company profit have been threatened considerably”.

As of the July 18, the Korean Won increased by 11.8% over the end of last year against US dollar. EUR and Yen also increased by 12.94%, 13.68% against US dollar respectively. However, Chinese Yuan hasn’t changed as 8.27 Yuan per dollar and Taiwan dollar and Singapore dollar increased only 6% less than the increase of Korean Won.

Accordingly, the institute forecasted, “ In the second half of the year, it is very likely that the growth tendency of the motorcar and shipbuilding industries will decrease. The steel and petrochemical industries have been significantly threatened. So, the economy will be depressed again”. Especially, it was forecasted that the construction industry is very likely to return to the minus growth through construction business stabilization measure of the government and worse foreign ordering environment based on the bullish tendency of Korean Won.

It is forecasted that the textile industry is close and tough. In a survey for 300 textile manufacturers in the country conducted by Korea Federation of Textile Industries, BSI of the second half of the year was 87. If BSI is over 100, there are many companies which consider the better business condition than the last year. If BSI is below 100, there are many companies which consider the worse business condition than the last year. BSI falls short of 100 in all fields such as a production, operation rate, export and domestic demand.

Besides, it is forecasted that IT and semiconductor industries will show the favorable tendency for the second half of the year. This business will not be influenced by the bullish tendency of Korean Won through high market share and improved technical competitiveness and will have the tendency of production growth increasing the image of ‘IT Korea’ after World Cup 2002.

In the investigation for the management of 90 internet companies in the country conducted by Korea Internet Corporations Association, the internet BSI of the third quarter was 139. Such as Portal Contents, the internet industry had the highest BSI of 154. BSI of the supporting industry such as the solution consulting was 140 and the fundamental industry such as hardware and software showed the BSI of 113.