By Kim Sung-jin
Staff Reporter



Korean exporters’ business confidence for the first quarter of next year plummeted to the lowest level since 2002, reflecting the concerns spreading among local companies over the rising value of the Korean currency crippling their exports’ profitability.

According to the export business survey index (EBSI) compiled by the Korea International Trade Association (KITA), the index came out at 90.5, the lowest since fall 2002, when the association began the quarterly survey. KITA surveyed 922 local exporting companies.

The EBSI is an index gauging export condition prospects for the coming quarter. An index above 100 indicates that a greater number of businesses predict exports will improve and an index below 100 suggests that pessimists outnumber optimists.

EBSI continued to hover above the 100 boom-or-bust line in 2004, recording 135.2 in the first quarter, 126.4 in the second quarter, 123.8 in the third and 104 in the fourth.

``The index shows that local exporting companies are worried over a drastic slowdown of exports next quarter and that the anxiety is spreading rapidly among exporters,’’ said Yoon Yong, a research fellow with KITA.

``Domestic exporting companies should strive to secure diverse channels to stabilize their raw material supply and pay more attention to foreign exchange risk management to keep up current strong exports growth next year,’’ he said.

By sector, exports are forecast to nosedive in the accessory (47.1) and leather and fur (30) industries next year. Downward export trends of metallic ores (55.6), nonferrous metals (64.7), plastic goods (86.3), rubber products (55.6), petrochemical products (66.7), steel (68.8), electronic parts (83.2), fisheries products (86.4) and textiles (87.3) are forecast to continue in the coming quarter.

Outbound shipments of ceramics (115.4) and agricultural products (110) are projected to carry on with notable performances.

The interviewed corporations predicted that the profitability of their exports (38) would shrink sharply next quarter and export prices (85.5) would climb, eroding their global export competitiveness (68.8). They also forecast that international supply-demand conditions (86.2) and their financial conditions (73.5) would aggravate and raw material import costs (93.1) will increase in the cited period.

By contrast, surveyed respondents gave a 111.3 for the number of consultations Korean companies will have with foreign importers, a 107.9 for the number of export contracts to be inked next quarter, 106.9 for factory operation ratio and 113.4 for the economic climate of Korea’s major export markets.

sjkim@koreatimes.co.kr