South Korea’s sluggish exports forecast to improve in second quarter

[Photo by Yonhap]

South Korean companies’ sluggish exports are expected to improve slightly in the second quarter of this year, according to a recent report.

The Export Business Survey Index (EBSI) for the April-June period was 90.9, up significantly from 81.8 in the first quarter, said the report released by Korea International Trade Research Institute (KITRI) under Korea International Trade Association on Tuesday. This is the first time in a year that the EBSI has turned positive since the third quarter of last year.

If the reading falls below 100, companies see the export market for the next quarter worsening compared with the previous quarter. The survey was conducted among 1,206 companies with export performances of over $500,000 last year.

Although the EBSI for the second quarter is still below 100, indicating that export is expected to decline versus the first quarter, the severity of the export decline may improve slightly, the report said.

The EBSI has been below the benchmark for five consecutive quarters after falling below 100 for the first time in two years in the second quarter of last year.

While the outlook for semiconductor export remains bleak, those for shipbuilding, plastics and automotive industries are expected to improve compared with the first quarter.

Exports are forecast to increase for ships with an index of 146.5, plastics, rubber and leather products was 125.8, petroleum products 102.1, home appliances 101.0 and automobiles and auto parts 100.9. In contrast, semiconductor exports recorded the lowest at 52.0 due to a decline in export prices and the growing trade conflict between the U.S. and China.

The outlook for electronics of 84.7 was also negative due to a decline in demand for IT products, and agricultural and fishery products remained below 100.