Nearly 80 percent of South Korea's 120 major companies plan to maintain their investment levels in the second half of the year, similar to those in the first half, amid growing uncertainties in the business environment, a recent survey showed Wednesday.
According to the survey released by the Federation of Korean Industries, 78.4 percent of responding companies -- drawn from the country's top 500 firms by sales -- said their domestic investment plans for the second half will remain at first-half levels.
"Companies have shown a cautious approach to new investments due to increasing export uncertainties and sluggish domestic consumption. Nevertheless, the new administration's stimulus measures and expectations of a market recovery appear to be prompting many firms to maintain their first-half investment scale," an FKI official said.
Meanwhile, 13.3 percent of respondents said they plan to reduce investment in the second half, while 8.3 percent intend to increase spending.
Companies planning to scale back cited rising uncertainties related to shifting policies under the second US administration under President Donald Trump, a continued slowdown in the domestic market, and risks stemming from foreign exchange volatility and rising raw material costs.
Firms planning to increase investment pointed to expected policy shifts under the new Lee Jae Myung administration, the need to upgrade aging facilities and optimism about improving market conditions.
Asked about risks that could affect investment in the second half, respondents cited an economic slowdown in key markets such as the United States and China, deepening global supply chain instability, rising energy and raw material prices and tightening financial markets. (Yonhap)