One of Two Major Corporations, "Unable to Set Full Investment Plans"

Among the Top 500 Companies by Revenue, 50.5% Face Various Risk Factors... Difficult to Proceed with Investment

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[Asia Economy Reporter Kim Jin-ho] A survey revealed that one out of two major domestic companies still has no investment plan for this year or has not yet prepared one. In particular, most companies that have set plans intend to maintain or reduce their investment levels compared to last year. Concerns are rising that companies will continue to find it difficult to actively invest due to various internal and external risk factors, such as instability in the domestic and international macroeconomic environment.

On the 14th, the Federation of Korean Industries (FKI) commissioned the public opinion research firm Mono Research to survey the top 500 companies by sales on their "2022 Domestic Investment Plans." The results showed that more than half (50.5%) of the 105 responding companies answered this way.

Responses indicating no investment plan accounted for 12.4%, while 38.1% said they had not yet formulated a plan. The proportion of companies that had set investment plans was 49.5%, but among them, 50.0% said their investment would remain at last year's level. Responses expecting a decrease in investment compared to last year were 11.5%. Those expecting an increase in investment compared to last year accounted for 38.5%.

As reasons why it is difficult to increase investment scale this year, 4 out of 10 companies cited instability in the domestic and international macroeconomic environment, such as the spread of COVID-19 and rising raw material prices (37.7%). This was followed by deterioration in external financing conditions, such as increased loan interest rates and stricter financial institution screening (20.5%), ▲worsening business environment due to poor operating performance (15.4%), ▲completion of major investment projects (8.5%), and ▲concerns over the spread of regulatory systems (6.0%).

The situation is similar not only for domestic companies but also for foreign-invested companies (WTO companies). According to the FKI, 9 out of 10 foreign-invested companies operating in Korea have not set investment plans for this year. In particular, only 8.9% of companies have set investment plans for this year, and among them, only 22.2% plan to increase investment compared to last year, showing significantly lower figures than domestic companies.

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