Korea's Machine Tool Production Seen to Grow 9.8% in 2014
Korea's machine tool production in 2014 is projected to grow 9.8% year-on-year to 6.38 trillion won. The growth projection is based on the expected recovery of domestic facility investment, the nation's export expansion to key overseas machine tool markets, including the United States and Europe, base effects from poor business performance results in 2013, and other factors.
According to the Korea Institute for Industrial Economics and Trade (KIET), domestic facility investment in 2014 will grow 5.5% year-on-year, a comparatively active recovery trend centering on IT manufacturing businesses thanks to export recovery and the alleviation of uncertainties.
Demand recovery in major overseas machine tool markets and employment of active domestic and overseas marketing by domestic enterprises also are likely to contribute to the growth of domestic machine tool production. Due to a low-growth trend of the domestic economy, continuation of weaker Japanese yen currency and growth slowdowns in huge markets like China and India, however, production in 2014 may, more or less, not be able to reach the record high results of 2012.
The 2014 demand related to automobiles, the largest demand business type, may improve compared with 2013 owing to the market debut of new domestic cars, but is not expected to reach demand levels similar to those experienced in early 2012.
However, the outlook for the global automobile market released on December 13, 2013, by the Korea Automobile Manufacturers Association (KAMA) indicated that internal and external demand for domestic machine tools in 2014 is expected to improve thanks to a 4.8% growth (90,3400,000 units) in global automobile sales, with entry of the European market into a recovery phase and recovery of emerging markets. Meanwhile, if domestic machine tool production is converted into U.S. dollar equivalency, production will exceed US$6 billion for the first time in history, according to the foreign exchange rate projection (1,058 won/U.S. dollar) for 2014 by KIET.