IT Exports

It has been pointed out that Korean exporters will be able to enjoy better business conditions in the last quarter of this year, led by consumer electronics and mobile phone exporters. 

The Institute for International Trade (director Oh Sang-bong) of the Korea International Trade Association (KITA) conducted an Export Business Survey Index (EBSI) survey in which 965 local exporters participated. They announced on September 29 that the EBSI added up to 101.8 for Q4, 2013, to exceed the reference value of 100 for the third consecutive quarter. The EBSI has a maximum value of 200 and a minimum value of zero. The more positive the participants are about quarter-on-quarter economic prospects, the closer the value gets to 200, and vice versa. 

By survey item, export consulting (115.5) and export contracting (111.9) are expected to increase in the quarter, along with the capacity utilization rate (105.1). Meanwhile, the export profitability (72.2), the export unit price (74.9), and the manufacturing costs (76.5) are forecast to go through a slowdown. 

By export item, IT products such as consumer electronics (125.0) and mobile phones (115.6) are predicted to enjoy some boom. In particular, flagship smart phones like Samsung Electronics’ Galaxy Note 3 and LG Electronics’ G2 are expected to lead the export of handsets, while smart home devices and power-saving lighting fixtures will have a positive impact on the home appliances sector. 

Also, the automobile sector (101.5) is likely to enjoy a stable supply thanks to the recent resolution of the labor-management negotiations and free trade deals to increase its exports in Q4. However, things are forecast not to be favorable for computer manufacturers (75.0) with their overseas production ratio being on the rise. 

18.9% of the surveyees mentioned economic recessions in their export destinations as the biggest hurdle to their business for the final quarter of this year. 17.0% and 16.9% of them said that the prices of raw materials would go up and the won-dollar exchange rate would face greater uncertainties due to concerns over the Fed’s exit strategy from quantitative easing, respectively. 

“With the impact of the quantitative easing exit strategy turning out to be less severe than anticipated, mobile phone and semiconductor exporters are expected to continue their upward trend until this year’s end,” said IIT researcher Shim Hye-jeong.

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