Survey sees some hope for overseas sales in Q3

Korean companies expect exports to start improving in the third quarter, but they anticipate profitability will erode due to continued uncertainties in China and the United States, a survey conducted by the Korea International Trade Association showed yesterday.

The Export Business Survey Index of 980 Korean exporters was 101.6 for the July to September period, up from 100.5 in the second quarter.

It is the first time exporters’ sentiment exceeded 100 for two consecutive quarters since January through March 2008.

If the index exceeds 100, it indicates a majority of exporters have a favorable economic outlook.

The KITA findings show that exporters anticipate an increase in contracts and consultations during the third quarter, but expectations for profitability and unit price remained in the high 70s.

“Korean exporters expect at least a slight improvement in exports and they expect gradual recovery of the export economy,” said Hong Ji-sang, a chief researcher at KITA’s Institute for International Trade. “China’s economic growth, which slowed down to 7 percent, and the U.S. announcement of an exit strategy [for its quantitative easing bond-buying program] has heightened the fear of exporters. There needs to be careful monitoring of the export environment, not to mention preparing for appropriate and timely countermeasures.”

Meanwhile, the survey showed that businesses see their biggest hurdle as uncertainties surrounding the U.S. and Chinese economies (18.3 percent), followed by an increase in foreign exchange volatility (17.5 percent) and the rise in raw material costs (16.4 percent).

By sector, businesses anticipate that exports of ships and IT products will pick up in the third quarter. In contrast, businesses have a gloomy outlook for exports of steel and petroleum products.

BY KIM MI-JU [mijukim@joongang.co.kr]