By Kim Tae-gyu
Staff Reporter

Although the economy shows signs of recovering, Korean companies are found to be overly hesitant to invest in facilities or recruit new employees due to uncertainties lying ahead.

The Bank of Korea (BOK) said Sunday that the country's private firms chalked up a net increase of capital by 67 trillion won during the one-year period since Oct. 2008 ― 37.2 trillion won from corporate bonds and 29.8 trillion won via loans.

However, they saved more than a third of the fresh funds as a war chest so that their balances in long-term savings accounts, longer than 12 months, rocketed at an unprecedented pace.

Corporations in Asia's fourth-largest economy maintained 103.8 trillion won in long-term savings as of the end of this September, up 24.8 trillion won, or 31.5 percent, from the year before.

``The annual gain is a record high ever since we started to compile data in 2003. Companies seem to be preparing for the future in a conservative way in the wake of the financial crisis,'' a BOK official said.

``Along the same line, they did not invest. Over the past year, they reduced spending on constructing fresh facilities or repairs for the first time in several years.''

Over the October 2008 to September 2009 period, corporations invested 68.7 trillion won in nominal terms, down 4.4 percent from a year ago, reversing the upward trend for the first time since 2003.

On a more negative note, they are extremely reluctant to hire new workers, with this tendency persisting even before the international financial turmoil hit the economy last year.

According to the survey on the 546 member corporations of the Korea Listed Companies Association (KLCA), they have racked up an overall increase in sales of 24 percent since 2005.

Yet, their combined payrolls diminished by 2 percent over the four-year period.

``Our member firms have gained an approximate 6 percent rise in their annual turnovers on average since 2005. But the number of employees did not follow the upward inclination,'' a KLCA representative said.

``Out of the 546 firms surveyed, 318 said that their workforce has been reduced over the period.''

Daewoo Electronic Components saw the steepest cut in payrolls from 506 to 101. Large-sized outfits were not an exception as demonstrated by Samsung SDI, which also reduced the number substantially from 9,819 to 6,265.

voc200@koreatimes.co.kr