Manufacturers Downbeat About Economic Prospects for 2008: Poll

Most South Korean manufacturing companies paint a gloomy picture of the country's economic outlook for 2008 due to weak domestic demand, anemic corporate capital spending and slowing exports, a poll showed Tuesday.

According to the survey of 500 manufacturers by the Korea Chamber of Commerce and Industry (KCCI), 42.6 percent of the respondents expect next year's economic conditions to be similar to those of this year, while 32.6 percent said the economy will take a turn for the worse.

Only 24.8 percent said the economy will change for the better next year, the KCCI said.

According to the findings, 28.8 percent cited fragile domestic consumption as the main reason for their pessimistic outlook. An additional 28.2 percent cited sluggish facility investments and 21.5 percent cited slowing exports.

The respondents also predicted that the Korean economy is likely to expand 4.8 percent on-year, below domestic economic think tanks' estimate of 5 percent.

The companies forecast soaring oil prices will be the main negative factor for the economy, trailed by rising prices of raw materials and the South Korean won's rise against the U.S. dollar.

"Despite the recent upward trend in the economy, a majority of manufacturing companies' economic forecasts for next year remain bleak due to rising oil prices," the KCCI said.

The price of Dubai crude oil, the country's benchmark, surged 57.5 percent this year to a record-high US$90.10 a barrel as of Monday.