March Exports Surpass $50 Billion, 20% Increase Expected in Q2... Beneficiary Industries Identified

Differentiation of Export Improvement Beneficiary Industries

[Asia Economy Reporter Lee Seon-ae] Export value in March exceeded $50 billion for the first time this year, marking a 16.6% increase compared to the same period last year. Exports in the second quarter are also expected to grow by around 20%. However, it remains unclear whether these benefits will spread across the entire manufacturing sector, so the beneficiary industries are expected to be differentiated.

According to KTB Investment & Securities on the 3rd, March exports increased by 16.6% year-on-year (imports increased by 18.8%), and the average daily exports also rose by 16.6% as the number of working days was the same as last year. The export value in March reached $53.83 billion, surpassing $50 billion for the first time this year, and the average daily export value was $2.24 billion, slightly lower than last month's level ($2.3 billion), but it recorded the highest level ever for March and the second highest since 2019.

By product category, semiconductor demand remains solid (+8.6%, increasing year-on-year for nine consecutive months), and petrochemicals surged 48.5% year-on-year due to price increases following the rebound in oil prices, setting a record high export value. Additionally, biohealth (+43.6%, increasing year-on-year for 19 consecutive months), automobiles (+15.3%, the highest in 4 years and 3 months), and general machinery (+6.9%, the second highest ever) also led the expansion in export growth. Exports to the four major markets?China (+26.0%), the United States (+9.2%), the EU (+36.6%), and ASEAN (+10.8%)?all increased.

Export momentum is expected to continue into the second quarter. Considering the consumption boost from additional U.S. stimulus measures, improvements in Chinese manufacturing, and base effects, the export growth rate in the second quarter is likely to exceed 20% year-on-year. This indicates that sustained strong export performance could raise the domestic economic growth rate this year.

However, it is uncertain whether these benefits will spread across the entire manufacturing sector.

Im Hye-yoon, a researcher at KTB Investment & Securities, explained, “Demand recovery is concentrated in certain items such as semiconductors, automobiles, and machinery, which may lead to disparities in price pass-through power and volume recovery.” She added, “The recovery in export performance this year is driven by intermediate goods exports to China and consumer goods exports to the United States.”

She said, “Intermediate goods exports to China have a high proportion of semiconductor-related items, while the top consumer goods exports to the U.S. include automobile-related items. If economic recovery centered on the U.S. and China occurs this year, the contribution of these items will remain high, concentrating the benefits of export recovery.” She continued, “Also, from the inventory cycle perspective, industries where production and investment expansion are easier include semiconductors, automobiles, machinery and equipment, and primary metals,” emphasizing, “We need to keep in mind the possibility that the benefits of export improvement will be differentiated.”

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