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S. Korean service industry sees fast growth

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Published : 2014-08-18 11:45
Updated : 2014-08-18 11:45

South Korea's service industry has rapidly increased sales and employment over the last five years, outperforming the manufacturing sectors, data showed Monday.

The number of workers employed by 330 listed companies in the seven service sectors jumped 46.5 percent to 274,766 last year, up from 197,505 in 2009, according to data compiled by Chaebul.com, which tracks the nation's big business groups.

The government pledged last week to nurture the seven service areas -- health, medical, tourism, education, finance, logistics and software -- to foster globally competitive players.

Excluding the service sector, employees at 1,384 companies in other industries grew 36.1 percent to 944,263 in the last five years.

The total amount of wages paid to workers in the service sector soared 61.9 percent to 13.3 trillion won (US$13.06 billion) in 2013, while other sectors inclined 35.2 percent in the same period.

Combined sales by service firms climbed 34.5 percent to 110.1 trillion won, while the respective amount for non-service companies increased 22.3 percent.

Their profitability, however, remained at a similar level due to the high proportion of fixed costs, such as labor and

development costs, in the service industry, Chaebul.com said.  

The service sector's net profit advanced 14.2 percent in the 2009-2013 period, whereas that of the non-service sector surged 13.2 percent, data showed.

Among service areas, contents and tourism firms created the most jobs, while the education sector lessened its recruitment during the cited period.

Workers at contents firms vaulted 61.7 percent to 148,076 in 2013, while the respective figure for tourism rose 57.8 percent to 64,359 during the period.

Software, logistics and medical companies increased their sales in the last five years, but education and securities firms' sales declined.

By comparison, average sales by local securities firms slipped 4 percent to 40 trillion won in the last five years due to decreased brokerage fees coming from the stagnant local equity market.

Market underdogs in securities, insurance and banking were hit harder by the dull stock market, causing them to carry out massive layoffs of nearly 50,000 employees over the past year, according to the July data by Statistics Korea. (Yonhap)

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