Out of 10 major corporations, 9 have indicated plans to maintain or exceed their investment levels from the first half of the year into the second half.
Kim Minyoung
kimmy@alphabiz.co.kr | 2024-07-08 07:34:47
[Alpha Biz= Reporter Kim Minyoung] Despite prolonged high interest rates, a strong exchange rate, and global uncertainties, 9 out of 10 major corporations in South Korea plan to maintain or increase their investment levels in the second half of this year compared to the first half.
According to a survey conducted by the Korea Economic Association (KEA) with research agency Monolithe Research, out of 132 respondent companies among the top 500 firms by revenue, 74.2% (98 companies) stated they would invest similar amounts to the first half. Additionally, 16.7% (22 companies) indicated plans to expand their investment, while 9.1% (12 companies) planned to reduce it.
The primary reasons cited by companies intending to increase investment include replacing and improving outdated facilities (31.8%) and expectations of improved business conditions (31.8%). Some companies (13.7%) also expressed their intention to secure competitiveness through proactive investment during economic downturns.
On the other hand, companies planning to reduce investment cited concerns over continued global monetary tightening, including high interest rates (33.4%), and the risk of rising costs (16.7%). Despite these concerns, KEA interpreted that overall, many companies are aiming to maintain or increase investment levels, driven by expectations of economic recovery through global demand growth, despite ongoing monetary tightening concerns.
Regarding the timing of intensified investment activities, 37.1% of respondent companies anticipated the first half of next year, with 24.2% indicating that investment activities are already active, and 15.2% looking towards the second half of this year.
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