• Trade Industry “Exports will Improve from Next Year”
    2019-12-26 hit 2097

    Trade Industry Exports will Improve from Next Year


    - 1Q Export Business Survey Index is 102.2 expects to see export recovery in semiconductors, ships, etc. -


    It is expected that the downward trend in exports this year will improve in the first quarter of next year.


    According to a report titled Export Industry Outlook for The First Quarter of 2020’, which is the result of the survey of 984 Korean exporters, issued by the Institute for International Trade (President: Shin Seung-kwan) of the Korea International Trade Association, the Export Business Survey Index (EBSI) for the first quarter of next year is 102.2, exceeding 100 in five quarters since the fourth quarter of 2018.


    If the index exceeds 100, it indicates that export conditions will be better than now.


    By product, exports of ships, semiconductors, and household goods are expected to improve. While semiconductors’ unit prices are expected to go up, the exports will increase on the back of the expansion of the 5G mobile communications market and the recovery in demand for data center investments by major IT companies. In terms of ships, the index improved significantly from 94.9 in the fourth quarter to 149.4 as the exports of ships are also expected to rise with the increased export volume to India for the first quarter of next year.


    In contrast, the exports of chemical industry, machinery, and steel sectors are expected to remain sluggish. The exports of chemical industry products are expected to decline due to falling oil prices and sluggish demand in China. The condition for machinery exports are expected to deteriorate due to economic slowdown in major export destinations such as China and Vietnam. Also, stagnant global demand and expanded production of major countries will worsen the export environment for steel and non-ferrous metal products.


    By item, slight improvement of ‘export consultation’ (105.1) and ‘export contract’ (102.3) compared to the fourth quarter see robust export volume. However, the report expected that ‘manufacturing cost of export goods’ (85.9), ‘economy of export destination' (87.4), 'exporters’ profitability' (89.3), etc. would continue to undergo negative conditions due to delays in the global economic recovery, buyer’s request for price cut, and rising prices of raw materials.


    The exporters selected 'buyer’s request for price cut’ (15.5%), 'rising prices of raw materials' (15.3%) and 'slowing economy of export destination' (13.3%) as major export difficulties in the first quarter of next year.


    Yoo Seo-kyung, a researcher at the Institute for International Trade of the Korea International Trade Association, said, The index has surpassed 100 in five quarters since the fourth quarter of 2018 and it is a sign of export recovery and added, However, as external risks such as US-China trade conflicts still remain, continuous monitoring and responding are required.

    < The Export Business Survey Index (EBSI) Trend>


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