HSBC Navigator provides comprehensive insight into the now, next and how for business, representing the views of over 9,100 business decision-makers across 35 markets. This report gives an understanding of how businesses like yours can continue to grow now and in the future.
Multiple growth pressures but room to manoeuvre
South Korean businesses have taken a realistic stance in 2019. As an export-driven economy with a strong focus on manufacturing, the country has felt the effects of the cooling global market. However, South Korea is unusual in having an expansive fiscal policy while monetary policy is cautious, giving the Bank of Korea room to take measures to stimulate growth1.
Short-term caution gives way to longer-term optimism
With exports recording consecutive year-on-year declines throughout the first three quarters of 2019, South Korean companies are realistic in their expectations for growth. Just under one in five (19%) are more optimistic in their outlook compared to last year, with more than half (55%) expecting things to remain the same – this is the highest figure globally alongside Japan.
However, the longer-term outlook is considerably more optimistic, with nearly three quarters (74%) of South Korean companies expecting sales to grow over the next five years. That said, the percentage of high-growth firms – those expecting sales growth of 15% more – is only 11% over the same period. This is lower than the expectation of firms globally (the global average is 26%).
Nearly three quarters (74%) of South Korean companies expect sales to grow over the next five years
Over the next year, 9% of South Korean firms are expecting their sales to grow by 15% or more.
22% of South Korean businesses expect sales will shrink in the near term and, among them, more than half (57%) blame increased competition.
Half (50%) of South Korean companies expecting sales shrinkage next year are concerned about the limited availability of skills in their workforce. However 25% plan to invest in new workforce skills as a strategy to combat business decline.