South Korean automakers paint a much dimmer picture of their business outlook for September than firms in other sectors due to global protectionism and concerns over strikes and ordinary wages, a think tank said Tuesday.
The Korea Economic Research Institute said its business survey index for the auto-related sector came to 77.6 for September, well below the benchmark 100 and the lowest among 23 industrial sectors.
A reading below 100 means that pessimists outnumber optimists. The survey was taken on the country's top 600 companies by sales.
The low reading for the auto industry comes amid a series of negative factors. Concerns are rising that local automakers may take a hit from Seoul-Washington talks on a possible revision of their free trade deal. Unionized workers of top automaker Hyundai Motor Co. started a partial strike over wages Monday.
(Yonhap)
A local court is slated to rule on ordinary wages for the No. 2 carmaker Kia Motors Corp. on Thursday amid worries a decision to include bonuses and other extra stipends as part of regular wages would be a harsh blow not only to Kia but to their chain of subcontractors.
According to KERI, the overall BSI for all companies stood at 94.4 for the coming month, staying below the benchmark 100 for the 16th straight month.
It is the longest below-par streak since the reading remained below 100 for 31 straight months starting in July 1996, just before the start of the country's foreign exchange crisis.
By sector, the subindex for the manufacturing segment amounted to 92.6 for September with the comparable figure for the non-manufacturing sector clocking in at 96.6.
"Amid the stagnant recovery of the economy, local businesses remain pessimistic about their business outlooks due to a series of negatives, such as a possible amendment of the South Korea-US free trade deal, North Korea's nuclear program and the regular wage issue," KERI said.
Meanwhile, the BSI on the actual performance of local businesses was tallied at 88.5 for August, remaining below the benchmark 100 for 28 months on end.
The below-par reading was attributed to flaccid domestic demand, a US rate hike and seasonal factors, such as the summer vacation season. (Yonhap)
