Auto, IT industries to pull off strong growth in Q2: report
Korea's automobile and information technology (IT) industries are expected to enjoy strong growth in the second quarter of this year, underpinned by growing overseas demand, a report showed Sunday.
The country's shipbuilding, construction and pharmaceutical industries, however, are bracing for deteriorating business conditions triggered by sluggish overseas orders and a weak domestic property market, according to the report by the Korea Chamber of Commerce and Industry (KCCI).
Exports of South Korean cars are forecast to grow in the three-month period fueled by free trade agreements (FTA) with advanced industrialized economies, a lower excise tax on mid-size vehicles and the release of new models.
The KCCI also said the popularity of smartphones, tablet PCs and organic light-emitting diodes (OLED) made by local companies will buoy the IT sector. The Summer Olympics in London in July could also stimulate the global digital electronics market.
Marked improvement in brand recognition of Korean products is expected to help the automobile and IT industries in the April-June period, the chamber claimed.
Besides autos and IT, the country's semiconductor, petrochemical, textile and clothing sectors are forecast to do better in the second quarter than in the first three months of this year, thanks to the FTA with the United States that went into effect on March 15.
Other industries expecting to see some improvement are the machinery and petroleum refinery sectors.
The country's largest economic organization with 135,000 members said despite eight of the 12 industries checked likely to do better in the coming months, some businesses may face stiff challenges.
The shipbuilding and construction sectors will be weighed down by sluggish global economic growth and domestic market woes, while pharmaceuticals must cope with the government's decision to lower drug prices and an influx of products made in the United States that will be imported more cheaply in the wake of the FTA.
The steel industry is also expected to falter in the second quarter because of contracted demand from builders and shipbuilders, and slowing growth in China, which is a major importer of steel products.
The KCCI, meanwhile, said high crude oil prices, worries of a "hard landing" for China's economy, persistent eurozone problems and a weak Japanese yen need to be monitored carefully. It said businesses and the government should be prepared to take action to limit any fallout from negative external developments.(Yonhap)