December 14, 2018 12:45
Korean companies' sales growth has been standing still for six years now, and even big listed companies' business is slowing down.
Market researcher Korea CXO Institute said that a study of the performance of 1,000 companies showed their combined sales creeping up from W1,482 trillion in 2012 to W1,492 trillion in 2017. But if Samsung Electronics is excluded, sales actually fell from W1,341 trillion to W1,330 trillion.
The number of companies with annual sales of W1 trillion has also remained more or less the same in recent years, jumping from 69 in 1996 to 192 in 2012 but then dipping to 184 in 2016 before slightly rising to 187 last year.
The institute blamed the outdated Byzantine structure of Korean industry. Oh Il-sun at the institute said, "Today's top 50 corporations have barely changed from 20 years ago. The structure of core industries like electronics, cars, chemicals and steel remains the same, and this has stifled growth."
The Bank of Korea, in a report released Thursday, said companies subject to external audits with assets of at least W12 billion saw their on-year sales growth rate fall to 3.5 percent in the third quarter from 4.8 percent in the previous quarter.
The crunch was especially drastic for small and medium companies, whose sales declined 2.4 percent in the third quarter on-year, double the contraction of 1.2 percent in the first quarter.
The Korea Economic Research Institute the same day released a study of 578 companies listed on the Korea Exchange which found that 268 or 46 percent suffered on-year sales declines in this year's first three quarters.
Prof. Lee Byung-tae at the Korea Advanced Institute of Science and Technology said, "In the U.S., new corporations like Google and Facebook keep appearing and leading growth in overall industry. Fostering new industries and providing business support through regulatory reform are absolute necessities."
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