SEOUL, KOREA – Where there is a will, there is a way. But in Europe where Greek’s economic crisis is swamping the EU members, people are losing their will to find a way. They as a result stop spending, and consumer markets contract. In the United States, though news reports are willing to show signs of reviving economy, it still is a long way to go. And Korea, as one of the world’s few economic powers, comes under the influence.
On August 1, the Ministry of Knowledge Economy files a report that dampens the economic outlook; Korea’s exports in July fell by 8.8 % at roughly USD 44 million since the same quarter last year. During the global economic meltdown in 2009, it shrank 8.5 %. The negative growth proves Korea is losing momentum. Director General for trade at the Ministry Jin-hyun Han says, “As conditions like ship export and the world economy suffer, we are witnessing a record slow-down. Considering worsening economic sentiment among corporates, any dramatic rebound is very unlikely past the 3rd quarter of this year.”
All 7 major industries have become victimized and are carefully measuring the situation. One of Korea’s main export items, “semi-conductor”, is deepening a concern as the industry keeps losing profits. IT products but smartphones are no exception. Prices for DRAM and NAND flash are falling. And Samsung Electronics, Korea’s largest IT manufacturer, turns to new growth industries for investment, but has to be patience before they bloom.
For TV and Display, two Korea’s flagship electronics manufacturers LG and Samsung were surprised at last month’s sharp decline of 34.2 % in exports. Even the London Olympic could not boost their sales. “In the summer, sales usually decrease. And local manufacturing units overseas contribute to such a dismal turnout," said LG Electronics.
Early this year, Hyundai and Kia’s car sales reached a record, leading Korea’s exports. But overseas markets are no longer favorable ; in Europe, the economy is driving people’s purchasing power away, and Japanese car makers like Toyota are stepping up competition in America. As a respond, they resort to Plan B: expanding the business into peripheral markets like Germany, Saudi Arabia, Oman, and South America since major car markets in Europe are drawn into uncertainty.
In the shipbuilding industry, demand keeps retreating. Small-to-Medium companies are going broke one after another. Some of them escaped a recent downfall, but their management is under enormous amounts of stress. People are worried that the declining market will not improve, which might lead to a worst case scenario: prevalent collapse across the industry.
The oil industry is sending a warning signal as well. Most of oil companies are fidgeting as the slowing global economy is expected to linger throughout the end of 2012. China, its biggest buyer, is backing out of deals without any indication of future return.
