Corporate Investment
The nation’s top 600 companies are expected to invest about 133 trillion won (US$125 billion) in 2014. This year’s estimated figure is a 6.1 percent increase from the 125 trillion won investment last year.
The survey was conducted on the 600 largest companies in terms of sales as of late 2012, with 450 companies responding.
On March 6, the Federation of Korean Industries (FKI) announced the findings of its survey conducted at the end of last year. According to the report, the aggregated investment by the country’s top 600 firms (financial business excluded) is likely to reach 132.9912 trillion won (US$125.1447 billion) this year.
Facility investment is expected to log 103.981 trillion won (US$97.846 billion) in 2014, a 5.9 percent year-on-year gain, while R&D investment is projected to total 29.893 trillion won (US$28.129 billion) this year, up 6.9 percent from 2013.
Among 600 companies, 255 firms said that they will increase investment this year, whereas 145 firms responded that they will curtail investment. The remaining 50 companies said their investments will be roughly on par with the previous year.
When asked about the reason for an increase in investment, 24.4 percent of respondents cited improvement of competitiveness, followed by production of new goods and development of technologies (23.5 percent), new business expansion (22.5percent), and upgrading of old facilities (17.4%).
By industry, investment in the manufacturing sector is projected to reach 86 trillion won (US$80 billion), a year-on-year increase of 6.5 percent, with petroleum refining, autos and car parts, electronics and telecommunications leading the increase. The figure for the non-manufacturing industry is predicted to amount to 47 trillion won (US$44.2 billion), up 5.4 percent from the previous year, with companies engaged in the utilities, wholesale and retail, and information service areas expected to fuel investment growth.
When asked about the government’s policy tasks to revitalize future investment, respondents named more tax incentives including a reduction in taxes (24.6 percent), greater financial support (22.2 percent), and deregulation (16.4 percent).
FKI Vice Chairman Lee Seung-cheol pointed out, “The poll clearly shows that regulation is one of the leading obstacles to corporate investment,” adding, “To make the effects of deregulation fully reflected in the industry field, objectives and tasks for the regulatory reform should be established by each government department.”