Facility Investment to Rise 14 Pct. This Year

Facility investment by Korea’s top 600 corporations is expected to rise 14 percent this year from a year ago.

A survey of 552 companies conducted by the Federation of Korean Industries released Sunday showed their combined facility investment will reach 92.4 trillion won this year. Those polled were among the nation’s 600 biggest firms in sales at the end of 2006; financial and insurance companies were excluded.

The investment figure is higher than last year’s 81.6 trillion won and the third-highest increase after 24.3 percent in 2000 and 18.7 percent in 2004, when venture capital enjoyed high popularity. If public enterprises are excluded, this year’s expected rise will reach 16.4 percent.

The federation said the huge increase is largely attributable to rosy expectations that the incoming administration will bring in a business-friendly environment.

On obstacles hindering facility investment, the companies cited negative external factors including rising prices of oil and raw materials (39.3 percent); deregulation (22.8 percent); the foreign exchange rate (9.8 percent); and labor-management relations (4.1 percent).

bae2150@donga.com