Korean Inc. normalizing capex from 2023 in bigger scope than pre-pandemic times: survey

About half of companies in South Korea are ready to up investment starting 2023 in greater steam than pre-Covid-19 years, a survey found.

The bank of Korea conducted a poll on 540 companies in Korea – 343 manufacturers and 197 service companies – from August 11 to September 2 on their capex plan after 2022.

According to the survey, 44 percent of the companies said they have new capex plans apart from repair and maintenance spending from 2023 onwards.

By industry, more than half of chemical materials and products manufacturers (65.2 percent), computer, electric and optical device producers (51.6 percent), transportation equipment providers (51.1 percent) and electrical equipment manufacturers (50 percent) said they would make new capital investments after next year.

About 46 percent companies outlining new capital spending said they would spend more heavily on capex compared to the pre-pandemic years from 2017 to 2019.

More than half of the computer, electronic and optical device producers said they would raise their capex from pre-pandemic level.

A majority of 70.9 percent said they will spend their own money on capex, while 29.1 percent will rely on finances from external sources.

More than seven out of 10 service companies said they will use corporate fund, while half of electrical equipment producers said they will raise funds externally.

Financial loans were the most preferred way of external financing (81.6 percent), followed by issuing corporate debts (31 percent) and government loans (24.1 percent) in the multiple-answer survey.

[¨Ï Maeil Business Newspaper & mk.co.kr, All rights reserved]