Export Companies, "Clear Expectations for Export Recovery in Early Next Year"

Q1 Export Industry Business Sentiment Index (EBSI) 112.1... Surpasses 110 for the First Time Since 2017
Recovery Expected in Petroleum Products, Semiconductors, and Automobiles, but Exchange Rate Volatility Poses a Challenge

[Asia Economy Reporter Hwang Yoon-joo] It has been revealed that domestic companies have high expectations for export recovery in the first quarter of next year.

According to the "2021 14th Quarter Export Industry Business Outlook Survey" conducted by the Korea International Trade Association's International Trade and Commerce Research Institute targeting 967 domestic export companies, the Export Business Sentiment Index (EBSI) for the first quarter of next year was 112.1, exceeding 110 for the first time in 15 quarters since the second quarter of 2017, indicating a significant improvement in the perceived business conditions of export companies.

An index above 100 means that export conditions are expected to improve compared to the current situation.

In particular, petroleum products (146.0), semiconductors (123.6), daily necessities (122.4), and automobiles and automobile parts (117.4) showed high indices in line with the outlook for global demand recovery. Additionally, among the top 15 major items including these, 11 items had indices exceeding 100, highlighting strong expectations for export recovery across most industries. On the other hand, products such as electrical and electronic goods (88.8), agricultural and marine products (90.8), and home appliances (91.9), where demand recovery is uncertain, showed little expectation for export market improvement.

By category, 'export consultations' (117.7), 'export contracts' (112.6), and 'export destination country economy' (111.7) are expected to improve, with the export destination country economy index exceeding 100 for the first time since the second quarter of 2019. Since the outbreak of COVID-19, 'economic downturn in export destination countries' has been the biggest difficulty for export companies every quarter, but despite the difficult situation in major countries, economic activities are continuing, and expectations for large-scale economic stimulus measures have significantly reduced this difficulty compared to the fourth quarter of this year.

On the other hand, 'export product manufacturing costs' (89.8) and 'export unit prices' (95.4) received predominantly negative responses, and 'export profitability' (95.0) is also expected to deteriorate somewhat. The report added that this is likely related to export companies citing 'increased volatility of the won exchange rate' (16.8%) as the biggest difficulty in the first quarter, following a significant recent decline in the exchange rate.

Kang Sung-eun, a researcher at the Trade Association, said, "The index exceeding 110 for the first time in over three years is a positive signal for export recovery," adding, "Although risks such as the resurgence of COVID-19 and the possibility of continued won appreciation remain, the easing of uncertainties due to the inauguration of the new U.S. administration and large-scale economic stimulus measures in major countries are expected to improve overall market conditions, leading to a gradual recovery of our exports centered on key industries."

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