Exports Keep Slowing
12 March, 2019
Exports continue to slow in March, raising alarm bells for Korea's chief source of economic prosperity.
According to the Korea Customs Service on Monday, exports in the first 10 days of this month fell 19.1 percent compared to the same period last year to reach US$11 billion. At this rate, Korea will suffer from three-consecutive months of declining exports. The longest period of export decline was from October of 2014 to July of 2016.
Semiconductor exports remain weak in money terms because global prices have fallen. Semiconductor exports in early March dropped 29.7 percent, while those of petrochemical products plunged 39 percent amid falling oil prices, and those of ships fell 9.7 percent. Exports to China fell 23.9 percent and to the U.S. 17 percent.
The decline is having a negative impact on Korea's already weak economy. Facility investment for January fell 16.6 percent, while imports of capital goods declined 36 percent.
The state-run Korea Development Institute said, "Investments and exports are slowing down even more, causing the mining, manufacturing and construction industries to weaken as well."
Industry conditions for memory chips, which had been spearheading Korea's exports until recently, continue to deteriorate. According to Taiwanese market researcher DRAMeXchange, prices of Korea's mainstay DRAM chip exports plunged 17.2 percent in January and another 14.5 percent in February.
Prospects for car exports are not bright either. The U.S. government is seeking to slap high tariffs on foreign cars, which could affect Korean automakers as well.
On top of that, labor unrest at Renault Samsung prompted the French automaker to delay allocating new production volume to the Korean unit, which has been unable to set its export target for this year. Last year, Renault Samsung exported around 100,000 Nissan Rogue compact crossovers to the U.S.
Meanwhile, the global economic slowdown is intensifying. The OECD lowered its global economic growth outlook for this year from 3.5 to 3.3 percent.
TAG(s):