"7 out of 10 Large Companies Have No or Undecided Investment Plans for Next Year"

Hankyung Association Surveys Investment Plans of Top 500 Companies for 2025

As geopolitical risks expand and protectionism strengthens, increasing uncertainty has led to seven out of ten large corporations having no investment plans for next year or not having established them yet. Even among companies that have formulated investment plans, many responded that they intend to 'reduce' investments, indicating that domestic investment is expected to contract somewhat next year.

The Korea Economic Association (KEA) commissioned the polling agency Mono Research on the 3rd to conduct the "2025 Top 500 Companies Investment Plan Survey" targeting the top 500 companies by sales. The results showed that 68% of responding companies either have not yet established investment plans for next year (56.6%) or have no investment plans at all (11.4%). Only 32.0% responded that they had formulated plans. The proportion of companies with 'undecided plans' (56.6%) increased by 6.9 percentage points compared to last year's survey (49.7%), and those with 'no plans' (11.4%) rose by 6.1 percentage points from last year's 5.3%.

Among companies with undecided investment plans (56.6%), the reasons for not establishing plans included ▲organizational restructuring and personnel changes (37.7%), ▲prioritizing assessment of internal and external risk impacts (27.5%), and ▲uncertainty about domestic and international economic outlooks for next year (20.3%).

Korea Economic Association

For companies that have established investment plans (32.0%), when asked about the scale of their 2025 investment plans, 59% answered that it would be at a 'similar level' to this year. Responses indicating a 'decrease' in investment (28.2%) exceeded those indicating an 'increase' (12.8%). In the same question last year, 'increase' responses (28.8%) outnumbered 'decrease' responses (10.2%).

Companies planning to reduce investment or having no investment plans cited reasons such as ▲negative domestic and international economic outlook for 2025 (33.3%), ▲deterioration of the domestic investment environment (including strengthened governance regulations such as the Commercial Act, 20.0%), and ▲expected contraction of the domestic market (16.0%).

Meanwhile, 77.8% of all responding companies forecast that their facility investments next year will remain at the level of 'maintaining and refurbishing existing facilities.' Only 18.9% responded that they would 'actively increase facilities.' The KEA commented, "In terms of investment quantity, most companies (87.2%) do not plan to increase investment next year, and qualitatively, a majority (77.8%) opt for passive maintenance and repairs," suggesting that aggressive corporate investment next year is unlikely.

Companies identified the biggest risk factors significantly impacting corporate investment next year as global economic slowdown (42.9%), followed by high exchange rates and inflationary pressures (23.0%), and the spread of protectionism and intensification of supply chain disruptions (13.7%). The KEA interpreted this as "amid forecasts of a slight global economic slowdown compared to this year, companies are focusing on economic downside risks such as contraction in global trade due to intensified protectionism and supply instability caused by ongoing geopolitical risks."

The biggest obstacles hindering domestic investment were found to be ▲lack of support such as tax incentives and subsidies for facility and R&D investments (37.4%). Additionally, companies cited ▲ESG-related regulations (environmental, social, and governance including the Commercial Act) (21.3%) and ▲regulations related to new or expanded facility investments (location restrictions, delays in permits, etc., 15.0%) as major difficulties.

As priority policies to improve the domestic investment environment, companies pointed to ▲expansion of financial support such as funding (21.0%), ▲strengthening tax support including corporate tax cuts and investment credits (16.9%), and ▲relaxation of governance and investment-related regulations (15.3%).

Lee Sang-ho, Head of the Economic and Industrial Division at KEA, stated, "Historically, corporate investment has been the key to overcoming crises whenever the economy was difficult, but recently companies have struggled to find momentum for expanding investments. It is necessary to avoid discussions on amendments to the Commercial Act that greatly increase management uncertainty so that companies can promptly establish investment plans, and to encourage active investment through bold incentives such as financial and tax support."

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