Industries downright downcast
Korean industry is expected to see its worse performance next year, particularly in its four major sectors: electronics, automobiles, steel and ships, according to the Federation of Korean Industries (FKI) yesterday.
At the 2015 Economy-Industry Prospect seminar in Yeouido, western Seoul, the federation, which represents conglomerates, said the world economy will grow as much as 3.5 percent next year, with the United States predicted to lead the recovery.
Korea also is expected to see 3.5 percent growth, but there are several downside risks, including the stagnant domestic economy and a weak Japanese yen, the FKI said.
The business group in 2013 predicted the Korean economy would expand 3.1 percent this year.
The FKI said Korea’s smartphone-dependent electronics industry will struggle because major manufacturers such as Samsung Electronics and LG Electronics have not developed or introduced new products that can spur new growth.
Facing a tough challenge from China and other nations that offer good-quality products at lower prices, it said the country will see 17 percent growth in the smartphone business next year, 19 percent less than this year, and will face tough competition from Chinese companies in the tablet PC, and LED and UHD television businesses.
A gloomy year is predicted for domestic automakers. The FKI cited low global demand and tough competition from Japanese brands backed by the weak yen.
Next year also is not looking good for steel and shipbuilding, as the 2015 global steel consumption forecast has been revised downward. In April, the World Steel Association said the world’s steel market would grow 3.3 percent next year, but it lowered its estimate to 2 percent this month.
Shipbuilders are expected to have fewer orders due to slow growth in the global economy. The weak yen that allows Japan to sell ships at lower prices also will hurt Korean companies, according to the federation.
In the petrochemical sector, the FKI said, lower crude oil and naphtha prices and increasing demand for products using polyethylene and polypropylene are good news for Korean companies. But it said there is plenty of supply due to a glut of plants in China.
“In order to overcome such economic difficulties, the government needs to improve and remove many excessive and unnecessary regulations that have been the real culprit behind various problems in industry,” said Park Chan-ho of the FKI, who participated in the seminar. “And companies need to study the current and future economic and industrial environment in order to respond to changes.”
BY KWON SANG-SOO [email@example.com]
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