Domestic Manufacturers Recorded Loss in 98

Domestic manufacturers in a survey were found to have recorded a loss of 18 won when selling a product worth 1,000 won last year.
This figure is the largest deficit ever recorded since 1962, when the Bank of Korea (BOK) began compiling a variety of statistics on manufacturers.
The rise of losses is due to the sharp increase of financial expenses such as interest paid on loans, although labor costs have been declining.
The Bank of Korea released a report on May 7, analysing business management in 1998.
According to the report, the increasing rate of sales by manufacturers was only 0.7 percent, much less than 11 percent of 1997. The fall stems from a decline of 14.9 percent in domestic demand, although exports increased 29.6 percent from the previous year.
Furthermore, the operation profit rate on total sales dropped to 6.1 percent from the 8.3 percent of 1997, although labor costs dwindled to 9.8 percent from 11.4 percent.
The debt-to-equity ratio for manufacturers fell from 396.3 percent in 1997 to 303 percent at the end of last year. However, if the 37 triilion won gained through the reassessment on real estate holdings is subtracted, the actual fall of the debt-to-equity ratio is marginal.
Jangsoo Seo:jsbee@joongang.co.kr