Eurozone crisis to weigh down on industrial conditions in H2: KCCI

The Korea Chamber of Commerce and Industry announced Tuesday that industrial conditions will worsen in the latter half of this year due to the economic crisis occurring in the eurozone.

In research conducted with 11 different organizations, the second-half forecast for the information and telecommunications and machinery sectors is on the bright side with a slightly mixed outlook for semiconductor, automobile and petrochemical businesses.

But outlooks for the steel, oil refinery, clothing and construction industries are looking on the down side with the eurozone crisis having a big impact on the construction and shipbuilding businesses due to a reduction in order numbers, the chamber officials said.

“The three major anxiety factors for the second half are the sluggish global economy, hike in industrial electricity fees and the attack of the labor circles in line with the presidential election later this year,” said KCCI officials.

The information and telecommunications industry has the best forecast for the remainder of the year with the London Summer Olympics upcoming July 27-Aug. 12.

The beginning of digital broadcasts starting from the end of this year and the launch of Windows 8 and smartphones like the Galaxy S3 are also expected to boost sales in the sector ― up an estimated 8.7 percent in exports, the KCCI said.

For the machinery sector, exports to EU regions will see cuts. However, exports to the U.S., China and the Middle East are likely to surge 11.8 percent compared to the first half of this year, said KCCI officials.

The export figure of Korea-manufactured automobiles is likely to hit the 1.6-million mark centering on the U.S. market in the latter half, but the demand for imported cars in the country is expected to increase up to 13.7 percent compared to the first half, the report said.

The petrochemical industry is suffering from worsened export conditions in advanced economies such as the U.S. and EU, according to KCCI officials. But it will likely bypass a crisis as local companies like Hanwha Chemical and LG Chem are planning to increase investments up to 12.1 percent during the remaining year.

With the roll-out of more smart gadgets including Apple’s upcoming iPhone 5, exports in the semiconductor business are estimated to rise by 11.6 percent in the second half.

The shipbuilding and construction industries, however, will go through tough times in the remainder of the year with the export figure for the shipbuilding sector forecast to shrink 28 percent compared to the first half of this year, it said.

The construction sector is also expecting its orders to decrease 3.9 percent in the latter half with a high burden remaining in consumer debt.

“The level of anxiety is increasing in the general world economy as it is getting difficult to find a solution to the eurozone crisis in the short term,” said KCCI executive Park Jong-gap. “The government must take preemptive steps like giving support in exports and offering more funding support to prepare countermeasures for the local economy.”

By Cho Ji-hyun (sharon@heraldcorp.com)