Corporate Profitability
On Nov. 16, the Korea Economic Research Institute hosted a seminar in Yeouido, Seoul, with the theme of Korean manufacturers’ growth potential and profitability since the global financial crisis of 2008.
At the conference, Yonsei University professor Shin Hyun-han mentioned that the 200 biggest Korean manufacturers recorded a sales revenue growth rate of 20.99 percent in 2008, immediately after the financial crisis, but the percentage dropped to 6.33 percent in 2009 and then to 0.52 percent last year.
“In contrast, the percentage of manufacturers in developed countries such as the United States rose from 6.95 percent to 8.65 percent between 2009 and 2010, and was maintained at 4.19 percent in 2012, 3.69 percent in 2013 and 4.16 percent in 2014,” he continued, adding, “Last year, Korea posted a corporate sales growth rate of 0.52 percent, easily eclipsed by advanced economies’ 4.16 percent, OECD member countries’ 3.69 percent and emerging economies’ 5.06 percent.”
The professor also pointed out that Korean companies’ average operating profit ratio fell from 6.79 percent to 4.23 percent between 2000 and last year, while that of those in developed countries increased from 6.17 percent to 8.01 percent during the same period. “The negative trends in Korea can be attributed to Korea’s economic growth rate much lowered in the wake of the global financial crisis, and its industrial structure relying heavily on exports and highly vulnerable to currency depreciation,” he remarked.