By Choi Sung-jin
The growth potential and profitability of Korea's key industries, such as electronics, automobile, chemical and shipping, lag those of the United States, China and Japan, a report said Thursday.
"The sales growth rates of the U.S., Chinese and Japanese industries have turned upward since 2011, but that of Korea continued to be in the doldrums," said the Korea Economic Research Institute in the report titled "Global competitiveness comparison of Korea's key industries."
In the case of shipping, Korean companies' sales growth plunged from 40 percent in 2010 to -16 percent last year. For the Chinese and Japanese shipping lines, sales turned around to a growth trend in 2011, but their Korean counterparts' turnover has remained in a negative territory since 2012.
Korean electric and electronics firms registered sales growth of 25.5 percent, higher than those of the United States, China and Japan, in 2010. Last year, however, the Korean makers' sales growth stood at 4.1 percent, compared with 5.9 percent for U.S. makers, 6.6 percent for Japanese firms and 9.8 percent for Chinese companies.
Korean carmakers and chemical companies, too, saw their sales growth sink, from 25.5 percent and 20.5 percent in 2010, respectively, to -0.3 percent and -1.6 percent 2014.
"Korea's key industries have not been able to escape from the downturn," said the report. "That shows how their competitiveness has weakened in global markets."
The recovery of operational profits by major industrial sectors is also slow. Korean steelmakers' ratio of operating profit to sales was 5.9 percent in 2010 but it fell to 3.9 percent last year. The comparable rate of domestic automakers also declined, from 7.5 percent to 3.7 percent, during the period.
"Korean businesses in general have the problem of inefficiency, marked by a high sales cost ratio and low sales management ratio," it said. "Without sharply improving the sales cost structure, they will be crowded out of global markets."
The growth potential and profitability of Korea's key industries, such as electronics, automobile, chemical and shipping, lag those of the United States, China and Japan, a report said Thursday.
"The sales growth rates of the U.S., Chinese and Japanese industries have turned upward since 2011, but that of Korea continued to be in the doldrums," said the Korea Economic Research Institute in the report titled "Global competitiveness comparison of Korea's key industries."
In the case of shipping, Korean companies' sales growth plunged from 40 percent in 2010 to -16 percent last year. For the Chinese and Japanese shipping lines, sales turned around to a growth trend in 2011, but their Korean counterparts' turnover has remained in a negative territory since 2012.
Korean electric and electronics firms registered sales growth of 25.5 percent, higher than those of the United States, China and Japan, in 2010. Last year, however, the Korean makers' sales growth stood at 4.1 percent, compared with 5.9 percent for U.S. makers, 6.6 percent for Japanese firms and 9.8 percent for Chinese companies.
Korean carmakers and chemical companies, too, saw their sales growth sink, from 25.5 percent and 20.5 percent in 2010, respectively, to -0.3 percent and -1.6 percent 2014.
"Korea's key industries have not been able to escape from the downturn," said the report. "That shows how their competitiveness has weakened in global markets."
The recovery of operational profits by major industrial sectors is also slow. Korean steelmakers' ratio of operating profit to sales was 5.9 percent in 2010 but it fell to 3.9 percent last year. The comparable rate of domestic automakers also declined, from 7.5 percent to 3.7 percent, during the period.
"Korean businesses in general have the problem of inefficiency, marked by a high sales cost ratio and low sales management ratio," it said. "Without sharply improving the sales cost structure, they will be crowded out of global markets."
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