Big firms' capacity utilization dips below 80% in Q3

Korean large companies operated below 80 percent of their capacity in the third quarter of the year due to the global economic downturn, a corporate tracker said Tuesday.

The average capacity utilization rate of 200 out of the country's top 500 firms by sales came to 78.4 percent in the July-September period, according to the Leaders Index.

It was down 2.1 percentage points from a year earlier and even lower than the 79.4 percent posted in the third quarter of 2020, months after the country first reported the coronavirus outbreak.

The drop came as overseas demand for their products remained in the doldrums despite their increased production capacity, industry watchers said.

Construction material makers, shipbuilders and machinery manufacturers saw their operating rates shrink by the biggest margin over the cited period.

The average operating rate of construction material firms sank to 77.9 percent from 70.5 percent, with that of shipyards and machinery makers also dipping by 7.4 percentage points to 72.9 percent.

Comparable declines were 6.4 percentage points for energy firms, 5.4 percentage points for petrochemical makers and 3.2 percentage points for distribution companies.

Of the total 14 industrial sectors, only carmakers and auto parts manufacturers registered increases of 2.5 percentage points and 0.8 percentage point, respectively, during the period.

Only three out of the top 20 corporations by sales — No. 2 automaker Kia, leading auto parts maker Hyundai Mobis and major battery maker LG Energy Solution — saw their capacity utilization rise over the cited period.

In the third quarter, 93 companies ramped up their production capacity, but only 69 registered output increases, according to the corporate tracker.

Yonhap