Friday, March 7, 2014

[KMTI ➆] The Facility investment by manufacturing businesses in 2014

Korean Mfg. Facility Investment Seen at ₩72.6 Tril. in 2014

The Facility investment by manufacturing businesses in 2014 is projected to expand 1.6% year-on-year to 72.6 trillion won, which would account for 53.3% of the nation's total facility investment.

In terms of facility investment scale by business type, investment in electronic parts, computers and video & acoustic communications topped all sectors with 36.9 trillion won (ratio: 27.1%), followed by automobiles at 6.7 trillion won (5.0%), chemical products at 6.1 trillion won (4.5%) and primary metals at 5.6 trillion won (4.1%).
Whereas expansion of facility investment in 2014 is expected in the 'electronic parts, computers and video & acoustic communications,' 'automobiles' and 'oil refining,' facility investment is likely to decrease in 'chemical products' and 'primary metals.'
- Facility investment in the 'electronic parts, computers and video & acoustic communications,' accounting for the largest amount of investment among manufacturing businesses, will grow 5.1% year-on-year in 2014 due to projected investment expansion in semiconductors, electronic parts, etc.
- Facility investment in the automotive sector is expected to grow 8.5% year-on-year in 2014 because automakers have plans to develop new cars and expand factory facilities and because certain investment projects originally scheduled for 2013 were carried over to this year.
- Oil refining businesses are expected to increase investment by 6.8% year-on-year as investment for advancement of oil refining facilities is planned and large-scale expansion of production facilities will continue in 2014, building on last year, to prepare for growth in the Chinese petrochemical market.
In terms of investment growth rates, the 'other transport equipment' sector is expected to record the sharpest investment growth (21.6%).
- This projection reflects investment expansion in railroads, aircraft and other transport equipment-related businesses and the carry-over effects of investments which were not implemented in 2013 by shipbuilding enterprises due to a persisting business recession.
The business types that are expected to pursue facility investment growth for the second consecutive year are 'automobiles,' 'oil refining,' 'mechanical equipment,' 'rubber & plastics' and 'pharmaceutical products.'
- In contrast, the business types projected to experience investment declines for the second consecutive year are 'chemical products' and 'primary metals.'
- The business types forecast to increase investments this year despite investment declines in 2013 are 'electronic parts, computers, video & acoustic communications' and 'other transport equipment.'

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