South Korea’s top 30 business conglomerates will invest a total of 136.4 trillion won ($135 billion) into their business this year, up 16.5 percent from 2014, the nation’s largest business lobby group said Monday.
The employment by such businesses will slide but the total number of employees will still rise, the Federation of Korean Industries said in a report on its annual survey on forecasting the year’s economic climate.
According to the report, a total of 136.4 trillion won will be allocated to investment, up from 117.1 trillion won 2014. Seventeen businesses said they were increasing their investment while 11 said they have reduced it. Investment in facilities will take the lion’s share with 102 trillion won, followed by research and development taking 33.6 trillion won, mostly in the semiconductor, OLED, retail and energy industries.
The conglomerates expect to hire 121,801 new workers, down 6.3 percent from 129,989 in 2014. Nineteen companies expressed their willingness to reduce the number of new workers while only seven plan to hire more. Still, the total workforce for the 30 conglomerates will stand at 1.18 million, up 1 percent from a year before.
“It seems like the companies are expecting people to quit less this year,” said Lee Chul-haeng, an FKI official.
Song Won-keun, a researcher at FKI, forecast that businesses would keep their investment and employment vows if the government puts an effort into removing regulations and improving the business environment.
“The state ruling to increase the ordinary wage by 17.9 percent from a year ago as well as to push the retirement age to 60 from the current 53 have contributed to the passive employment forecast,” Song said.
“The government should adopt various measures including the wage peak program as well as a performance-based wage system to overcome such hurdles.”
The FKI surveyed Samsung, Hyundai Motor, SK, LG, Lotte, POSCO, Hyundai Heavy Industries, GS, Hanjin, Hanwha, KT, Doosan, Shinsegae, CJ, LS, DSME, Kumho Asiana, Dongbu, Daelim, Booyoung, Hyundai OCI, S-Oil, Hyundai Department Store, Hyosung, Daewoo E&C, Dongkuk Steel Mill, Young Poong, Kolon and GM Korea.
By Bae Ji-sook (baejisook@heraldcorp.com)
