Electronics and Furniture Stocks Soar Due to COVID-19... Which Stocks to Invest in During Consumer Sentiment Recovery?

[Asia Economy Reporter Ji Yeon-jin] Since the second half of last year, consumer sentiment has been recovering, and with recent signs of economic normalization, attention is turning to future investment sectors. After the domestic stock market was hit hard by COVID-19 last year, consumption centered on durable goods such as home appliances, computers, and furniture surged due to increased indoor activities. However, during the economic recovery phase, it is expected that consumption of semi-durable goods such as clothing, bags, and shoes, which had been suppressed, will take the lead.

Im Hye-yoon, a researcher at KTB Investment & Securities, stated on the 17th, "As restrictions on economic activities due to COVID-19 are gradually easing, the desire and purchasing power for consumption are being maintained, and demand for durable goods has been somewhat resolved," adding, "Among semi-durable goods, there is a possibility that the increase in consumption of clothing, shoes, and bags, which had relatively slower recovery, will be larger."

Last month, the Consumer Sentiment Index exceeded the baseline value (100) for the first time in 14 months, reaching 100.5. The household sector expecting improvements in the economy and employment conditions six months ahead (future economic outlook and employment opportunity outlook) also increased, and credit card approval amounts have been gradually rising since the second half of last year.

Since the major market crash in March last year due to COVID-19, stocks related to home appliances, computers, and furniture were the first to recover. This was because increased indoor activities were expected to explosively increase demand for replacement of home appliances, computers, and furniture. Additionally, the automobile sector attracted attention due to new car releases and reductions in individual consumption tax. As demand for these durable goods has been somewhat satisfied, it is said that if gradual consumption recovery continues, demand for semi-durable goods will significantly increase.

However, it is expected that recovery in major service sectors such as lodging, restaurants, transportation, arts, sports, and leisure will require more time. This is because consumption restrictions may occur depending on the level of COVID-19 spread (such as strengthening social distancing or progress in vaccination).

A similar trend is seen in the United States, where purchasing power is being stimulated through large-scale stimulus measures. Researcher Im said, "For consumption recovery to be sustainable, policy efforts need to focus on preserving the purchasing power of low-income and vulnerable groups," adding, "Last month, employment increased by about 310,000 compared to the same month last year, marking a turnaround to growth after 13 months, but contraction in employment among temporary and daily workers, self-employed, poor performance in the service sector, and labor oversupply remain."

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