Seoul - Yonhap
Growth disparity between industries and companies may widen in the second half of this year as exporters and large conglomerates are expected to outpace domestic market-centered businesses and smaller-sized companies, a private think tank said Sunday. The Hyundai Research Institute (HRI) said growth in the manufacturing sector should continue to expand by around 10 percent compared to the year before, but numbers for service fields that cater mainly to local consumers may move up in the 3 percent range. It also said industries and companies that ship products abroad will do well in the last six months of this year compared to those that make goods for the domestic market. \"Exports are expected to move forward after July, which can help corporate growth, but numbers for products hitting the local market may not do so well,\" HRI said. South Korea expects two-way trade to surpass the US$1 trillion mark for the first time this year, up from $823 billion tallied for last year. Such developments will be a continuation of existing trends since the growth in the gap between export-oriented and local shipments this year reached 12 percentage points as of April. The institute said that since small and medium-sized enterprises (SMEs) are more domestic-oriented in the products that they make compared to conglomerates, they will be more exposed to hardships. Tougher times for SMEs have already been observed as the production growth of smaller companies stood at 9.5 percent in the first quarter vis-a-vis 11.3 percent for big businesses. Besides exporters, the economic institute said companies in the information technology field and construction may experience hard times in the coming months. The HRI also said more must be done to fuel growth in the domestic market, as South Korean companies are doing more to expand into emerging markets and the European Union (EU). The South Korea-EU free trade agreement that goes into effect in July can fuel trade and boost earnings for local industries and companies.