Chamber issues a gloomy outlook for industries
According to a report released by the Korea Chamber of Commerce and Industry that uses a weather forecast for each industry, the outlook for the IT industry is sunny; partly cloudy for chemicals, apparel, machinery and textiles; and cloudy for cars, steel, shipbuilding, refining and construction.
The nation’s IT industry is expected to thrive on exports of memory chips, with shipments of DRAM and NAND flash memory chips expected to increase this year thanks to a series of new smartphones introduced in 2014. The chamber said growth of the Internet of Things (IoT), which the industry said will increase by 30 percent this year, is also a plus.
In electronics, sales for televisions could fall year-on-year in the first half due to the absence of many international sports events such as the 2014 Brazil World Cup and Sochi Winter Olympics last year. But the report says sales will increase in the second half. But the report said the nation’s smartphone business might not grow much due to intensified competition from Chinese brands.
The apparel industry, which the chamber said last year would be cloudy, will have a better year with a status of slightly cloudy. The report said the industry’s overall exports could increased 10 percent as the free trade agreement with China and Vietnam take effect early this year. The industry, however, will see only limited growth in the domestic market.
The machinery industry, which is forecast to be slightly cloudy, will be improve from last year thanks to increasing global demand led by the improving economy of the United States. It added that the industry’s exports could grow 4.9 percent from last year as manufacturing industries of the United States will improve this year, but the weakening Japanese yen and falling international oil prices could be a barrier for Korean companies.
The textile industry also is predicted to be slightly cloudy like last year, but exports will increase by 2.6 percent because of the recovering U.S. economy and increasing demand from Southeast Asia, especially Vietnam. However, the chamber report said Korean companies should be able to overcome the falling demand for textile materials by the Chinese.
“The IT industry is expected to be sunny this year as the memory chip industry is predicted to have a good year,” said Shin Kwan-ho, an economic adviser for the KCCI. “The first half in particular will depend on whether the Chinese economy improves and how the international oil price, which has fallen below $50 per barrel lately, changes.”
The nation’s car and construction industries are expected to have a bit tougher time than last year. Automakers are predicted to face a stiff challenge from foreign automakers both overseas and in the domestic market, and the number of orders from the Middle East is expected to fall this year due to slipping oil prices. The report added that the low oil price also could mean trouble for petrochemical and refining businesses.
BY KWON SANG-SOO [email@example.com]