Expecting a surge of 20.9% from a year ago to 83.3 trillion won

Facility investments by major local enterprise are expected to surge 20.9% to 83.3 trillion won this year compared with last year.

According to a recent report by the Korea Development Bank (KDB) that surveyed the Koreas’ top 150 enterprises, the annual facility investments by manufacturing companies among them are brisk in all business sectors but textile and automobiles this year, making it predictable that the year-end total of facility investment will be 49.7 trillion won, up 30.9% from last year.

Facility investments by non-IT sector are being led by steel, oil refining, petrochemical and transportation sectors. Facility investments by those business sectors by the end of this year are foreseen to shoot up 30.9% to 27.6 trillion won this year compared with the previous year. Led by global large-size enterprises, annual facility investments by IT industry are expected to grow 20.4% from a year ago in 2008.

Meanwhile, facility investments by non-manufacturing industries including construction sector are anticipated to increase at a relatively slow pace. Annual facility investments by the sector of electricity and gas are projected to increase 5% from a year to 11.8 trillion won, and those by telecommunication and logistics sectors are predicted to increase at 3.2% and 8.5%, respectively, this year compared with last year.

The KDB’s survey on the local enterprises showed that the ‘unstable price for raw materials’ is the largest stumbling rock against their facility investments, followed by a drop in profitability, weak demand and difficulty in raising funds.
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