"Feeling of Deterioration in Earnings in 9 out of 10 Industries"…Average Operating Profit Down 19%

'Survey on Industry-Specific Impacts of Prolonged COVID-19 Pandemic'
Exports Blocked in 8 Key Sectors Including Construction, Machinery, and Display

Federation of Korean Industries

[Asia Economy Reporter Dongwoo Lee] A survey revealed that 9 out of 10 industries have experienced a decline in performance since the outbreak of the novel coronavirus infection (COVID-19). It also forecasted that if the situation prolongs, all industries will face intensified performance deterioration.

The Federation of Korean Industries conducted an 'Industry Impact Survey Due to Prolonged COVID-19 Pandemic' targeting 10 major industry associations from the end of January to the 24th of this month. On the 31st, it announced that sales and operating profits across industries decreased by an average of 17.5% and 19.0%, respectively, compared to the same period last year.

In particular, as the number of countries and regions restricting entry and exit for Koreans increased to about 180, export routes were blocked for eight major industries including construction, machinery, display, semiconductors, petrochemicals, automobiles, electronic information and communication, and shipbuilding. The aviation industry took a direct hit at a near-collapse level, and most industries continue to experience shocks caused by COVID-19.

The report stated that if the COVID-19 pandemic continues for more than six months, all 10 surveyed industries expect a greater negative impact on sales and operating profits. In the event of prolonged crisis, sales and operating profits this year are expected to decrease by 24.0% and 23.3%, respectively, compared to the previous year, indicating a deepening performance shock across all industries.

For the key industries supporting our economy, exports from January this year until now are expected to decrease by an average of 6.6% compared to the same period last year. If the COVID-19 situation prolongs beyond six months, exports are projected to decline by an average of 17.2%.

The employment scale is also expected to decrease by an average of 4.4% across all industries and 1.8% in key industries up to the current point. If COVID-19 prolongs, employment is predicted to shrink by an average of 10.5% across all industries and 5.7% in key industries, indicating a larger reduction.

To minimize damage caused by COVID-19, the most necessary government policy support identified unanimously across all industries was 'relaxation of corporate regulations that restrict business activities.' This was followed by ▲emergency management fund support (7 associations) ▲expansion of consumption capacity for economic agents such as consumption tax reduction (6 associations) ▲support for production diversification and localization of production facilities (4 associations).

Yoo Hwan-ik, Director of Corporate Policy Office, said, "The COVID-19 pandemic is not a crisis in just one sector but a comprehensive crisis that delivers an all-out blow to demand and supply, domestic consumption and exports, households, companies, and government alike," adding, "It is urgent to prepare measures that companies need most, such as introducing temporary regulatory relief systems.”

This content was produced with the assistance of AI translation services.