Saneun, Corporate Facility Investment at 153.8 Trillion This Year "Investment Sentiment Shrinks Due to COVID Impact"

Survey of 3,023 Large, Mid-sized, and Small Enterprises
7.4% Decrease Expected Compared to Last Year's Performance

[Asia Economy Reporter Kangwook Cho] This year, the scale of facility investment by domestic companies is expected to decrease compared to last year due to weakened investment sentiment caused by the impact of the novel coronavirus disease (COVID-19) pandemic.

According to the facility investment plan survey report released by the Korea Development Bank on the 3rd, the scale of facility investment planned by domestic companies this year was estimated at 153.8 trillion won.

This is 12.4 trillion won (7.4%) less than last year's investment performance (166.2 trillion won).

In the facility investment survey conducted in the second half of last year, the expected scale of facility investment by domestic companies in 2020 was 169 trillion won, which was a 2.2% increase compared to the provisional investment performance of last year (165.3 trillion won).

However, since the beginning of this year, due to the impact of COVID-19 and other factors, domestic and international economic volatility has greatly increased, leading to a decline in investment sentiment among domestic companies.

In particular, the 7.4% decrease rate is estimated to have been significantly influenced by COVID-19 in the investment outlook because the survey was conducted from March to May this year when COVID-19 was spreading in earnest.

The Korea Development Bank stated that from the end of March to the end of May, a survey was conducted targeting 3,700 companies, and 3,023 companies (331 large enterprises, 1,108 medium-sized enterprises, and 1,584 small enterprises) completed their responses.

By industry, except for sectors such as electricity and gas, petroleum refining, and transportation, most industries including semiconductors and petrochemicals are expected to see a decrease in investment scale.

Last year's facility investment scale (166.2 trillion won) decreased by 1.5 trillion won compared to the previous year. This is analyzed to be due to a decrease in investment in the semiconductor sector, which has a high proportion of facility investment in the domestic industry.

The Korea Development Bank explained, "It is estimated that the impact of COVID-19 was reflected more significantly in the investment outlook than in reality," adding, "Therefore, to understand the actual scale of facility investment executed this year, it is necessary to observe the provisional facility investment performance for 2020 in the facility investment plan survey scheduled for the second half of the year."

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