‘Four out of 10 companies anticipate an economic slowdown this year, and most are planning a stable management approach,’ according to a survey.
The Korea Chamber of Commerce and Industry (KCCI) announced today (13th) that in a survey of 2,208 manufacturing companies across the country, 40.1% expected the overall economic trend in South Korea to slow down compared to the previous year.
36.3% of companies predicted similar conditions to last year, while 23.6% expected an improvement.
Regarding this year’s key management strategy, 67% of companies said they would maintain their current strategy, and 20.6% said they would reduce it, totaling 79.4% with a conservative approach.
Only 12.4% of companies were planning an expansionary management.
Compared to a survey two years ago where 65% answered with maintenance or reduction, there is a more pronounced conservative management approach.
Despite this, industries with positive market outlooks showed relatively more companies adopting expansionary strategies.
In the semiconductor industry, which is expected to boom this year, nearly half of the companies (47.0%) chose an expansionary management strategy. The pharmaceutical/bio and cosmetics industries also exceeded the average with 39.5% and 39.4%, respectively.
Conversely, the textile and steel industries, struggling with domestic market stagnation and price competition, saw the highest rates of companies adopting a contraction strategy with 20% and 17.6%, respectively.
When asked about the biggest risk to South Korea’s economic growth this year, the most common response was high exchange rates and increased volatility (47.3%).
This was followed by oil and raw material price volatility (36.6%), trade uncertainties triggered by Trump (35.9%), and global economic slowdown (32.4%)—reflecting high concerns about external factors.
Domestically, increased legislative burden on businesses (19.4%) and a weakening internal consumption structure due to aging (12.5%) were identified as risks.
The most emphasized policy the government should pursue for economic revitalization and business performance improvement was currency stabilization, noted by 42.6% of companies.
There were also significant demands for promoting domestic investment (40.2%), enhancing trade measures like tariffs (39.0%), and boosting consumption (30.4%).
The necessity for transforming industrial structures and enhancing competitiveness, such as supporting crisis industries (22.5%), and fostering AI and advanced industries (13.5%), was also raised.
KCCI’s research director Kang Seok-gu stated, “Despite the outlook for simultaneous improvements in exports and domestic demand this year, the cautious management approach among businesses will continue due to varying recovery rates by industry and external uncertainties.” He added, “Industry-specific support and bold incentives and regulatory improvements are needed to ensure that government policies lead to tangible growth momentum.”