Joseon↑ Parts↑ Steel↑ … New Year Changwon Companies' Sales Outlook 'Clear', Profitability 'Uncertain'

Changwon Chamber of Commerce and Industry Announces Results of Regional Business Outlook Survey for Q1 This Year

Changwon Chamber of Commerce and Industry.

[Asia Economy Yeongnam Reporting Headquarters Reporter Lee Sang-hyun] The economy of Changwon City, Gyeongnam, which marks its first year as a special city, is expected to improve this year, but securing profitability is still anticipated to be difficult.

The Changwon Chamber of Commerce and Industry announced on the 4th the results of the '2022 Q1 Changwon Regional Business Outlook Survey' conducted over 13 days starting December 1 of last year, targeting manufacturing companies in the Changwon area.

According to the survey results from 127 companies, the Business Survey Index (BSI) was 111.9. This marks the fourth consecutive quarter exceeding the baseline of 100, indicating that the first quarter of 2022 is expected to continue the recovery trend centered on sales and production volume.

However, although sales are expected to increase due to the resumption of domestic and international industrial activities and market recovery, securing profitability is still expected to be challenging.

Looking at the BSI by category, sales (111.9) exceeded the baseline, but operating profit (96.8) and financing conditions (94.4) fell below the baseline, and facility investment (99.2) was slightly weak.

This is interpreted as difficulties in profitability continuing due to simultaneous sharp increases in international raw material prices, real wages, and maritime logistics costs, as well as increased financial burdens from rising interest rates and producer price inflation.

Industries with a positive outlook for the first quarter of 2022 include 'Shipbuilding and Parts' (136.4), 'Steel' (133.3), as well as 'Machinery' (113.0) and 'Automobiles and Parts' (106.1). The 'Home Appliances and IT' (100.0) sector, which supported Changwon's manufacturing industry throughout 2021, was surveyed as stable.

By scale and sales type, large and medium-sized enterprises (110.3), small and medium enterprises (112.4), and domestic demand-oriented companies (117.2) have a positive outlook for the first quarter of next year compared to the current point, whereas export-oriented companies (92.6) have a negative outlook.

The recovery of export companies that led the recovery of Changwon's manufacturing economy last year is expected to slow somewhat in the new year.

A Changwon Chamber of Commerce official analyzed, "All company groups consider rising raw material prices and the ongoing impact of COVID-19 as the greatest risks," adding, "The recent high exchange rates combined with rising international raw material prices will further worsen profitability due to steep increases in production costs."

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