Due to Unit-price Rise
According to the Korea Economic Research Institute (KERI), exports by 47 listed non-banking affiliates of South Korea's top 10 conglomerates (business groups), such as Samsung and Hyundai Motor, have seen a decrease in their exports from 2013 to 2016 but a rebound in the first quarter of 2017 for the first time in four years. This was because exports of main industries have recovered due to a rise in the unit price of exports.
The KERI announced on July 30 that consolidated exports at listed affiliates of the nation’s top 10 business groups dropped by nearly 28.2 trillion won (US$25.11 billion) from 571 trillion won (US$508.46 billion) in 2013 to 542.8 trillion won (US$483.35 billion) in 2016. On the other hand, exports at 28 out of their 47 listed affiliates came to a combined 134.1 trillion won (US$119.41 billion) in the first quarter of this year, up 4.8 percent from 128 trillion won (US$113.98 billion) at the same period last year. The increase in exports at listed affiliates of the nation’s top 10 business groups in the first quarter was led by some industries. By industry, the electronics industry had the highest export contribution rate with 65.3 percent, followed by the steel and metal industry with 24 percent, chemical with 21 percent, retail and wholesale with 10.1 percent and automobile with 9.9 percent.
Meanwhile, exports at five industries had mixed results. Exports at the chemical, steel and electronics sectors grew by 24 percent, 15.7 percent and 6 percent, respectively, while exports at the shipbuilding industry continuously decreased by 12.5 percent.
However, The KERI says the recovery momentum will not be able to carry over into the latter half of the year. The think tank believed that the exports figures increased due to the growth in the unit price of exports, as exports in the first quarter increased 4.3 percent while the unit price of exports grew 10 percent. When oil prices, which greatly affects the unit price of exports, fall, exports are highly likely to drop as well.
The KERI said, “As the global economy, including the U.S., has picked up, exports have grown in the first quarter of 2017. However, the uncertainties, like increased protectionist sentiment and possible renegotiations to the Korea-U.S. free trade deal, will make the commercial environment face more difficulties. By creating the export friendly environment and securing the fundamental competitiveness, we should continue on with the current upward trend in exports.”