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Photo = Yonhap news |
[Alpha Biz= Kim Jisun] More than 40% of South Korean manufacturing companies have no concrete strategy to address growing trade uncertainties stemming from the United States, according to a new survey.
The Korea Institute for Industrial Economics and Trade (KIET) released its Q1 2025 Manufacturing Business Survey Index (BSI) and Q2 outlook on Wednesday.
Between March 17 and 28, KIET surveyed 1,487 domestic manufacturing firms. Of those, 42% said they have “no specific response strategy” for Trump’s trade policies. Sectors experiencing downturns—such as oil refining (58.1%) and steel (53%)—were particularly unprepared.
The percentage was also high among automotive (42.3%) and general machinery (45.6%) companies, both of which have significant export exposure to the U.S. “The auto industry relies on the U.S. for about half of its exports, and general machinery has seen notable growth in U.S. sales recently,” a government official explained. “These sectors are especially vulnerable to tariff policy uncertainties.”
When asked how U.S. tariff policies are affecting business operations, 35.8% of respondents cited a “decline in price competitiveness” of their main products. This concern was particularly high among semiconductor (43.5%), display (48.5%), and automotive (44.9%) manufacturers. Another 35.4% pointed to rising transaction costs and profit losses, noting that fluctuating tariffs are making it harder to secure new export contracts and manage logistics expenses.
Other concerns included reduced or delayed investment due to uncertainty (31.9%) and shifts in global competitive dynamics (20.3%).
These uncertainties have also led to a significant drop in the BSI. The Q1 sales index fell to 77, down 10 points from the previous quarter—marking the first time it has entered the 70s range since Q1 2023.
The BSI reflects manufacturers’ subjective assessments of their business conditions, including sales, inventories, and other indicators. A score of 100 indicates no change from the previous quarter; scores closer to 200 indicate strong performance, while those near 0 signal severe difficulty.
알파경제 Kim Jisun (stockmk2020@alphabiz.co.kr)
