Prospect of Growth Slowdown in Major Industries for Next Year

`The industry prospects of electronics, semiconductor and general machineries are bright, but the industry prospects of shipbuilding, steel, oils and construction are not good.`

It is forecasted that a growth rate of major industries will be slow down owing to a contraction of a private consumption and a depression of a facility investment in next year. However, the analysis said that the industries of electronics and general machineries would lead the business of next year.

The Korea Chamber of Commerce & Industry (KCCI) said in the report of `Business performance and prospects of major industries` on December 12, “Even though the growth rate of the Korean economy will be continued in the next year, the growth slowdown will be unavoidable owing to causes of economic anxiety such as an aggravation of a domestic economy based on the increasing household debts and a delay of the world economy recovery.”

▽ Dependence on Exports 〓 The advance of the semiconductor exports is expected. The semiconductor industry which shows the export growth of 16.4% this year, will increase by 20.5% through supply and demand stabilization of D-RAM market and the growth of data storage flash memory market.

It is anticipated that the industry of electronics will increase by 13.1% in next year owing to the demand increase of electronic appliances such as the digital home appliances and PC mobile phone. It is analyzed that general machineries will show the export increase of 9.8% through offensive marketing for the new foreign market such as China, Russia and Southeast Asia.

It is forecasted that the exports growth of the car industry will show the slowdown of 8%, due to the increase of the new motorcar demand and the decrease of diesel vehicle sales. In the field of the shipbuilding, the exports and production will decrease by 3.2% and 4.3% respectively owing to a lack of site engineers.

▽ Investment Depression and Contraction of Domestic Demand 〓 It is forecasted that the construction and steel will show a minus growth due to the aggravation of domestic economy. This year, the growth of the construction orders increased by 13.5% owing to the increasing orders in the public sections and a favorable tendency of a housing business. However, it will show the growth of -1.0% because of the inactive orders of the public engineering works for next year.

The household loan restraint policy of the government is an unfavorable factor which obstructs the construction business. Also, it is forecasted that the steel industry will show the minus growth (-0.4%) because of the increasing demands of the steel and section steel.

Besides, in the textiles industry which showed the minus growth in the production, domestic demand and exports, the exports competitiveness will be better focused on the high value added products for next year. Its exports and domestic demand will increase by 3.0% and 1.2% respectively.

Kang-Woon Lee kwoon90@donga.com