40.1% of Manufacturers Expect Economic Downturn This Year... 8 Out of 10 Prioritize "Stable Management"

Investment Delays Widen Amid Exchange Rate and Trade Uncertainties
Expansionary Management Dominant Only in Semiconductors
42.6% of Companies Call for Exchange Rate Stabilization from Government

Four out of ten domestic manufacturing companies expect the Korean economy to deteriorate this year compared to last year. Amid uncertain external conditions, eight out of ten companies are prioritizing "stable management" focused on internal stability over new investments.

The Korean Chamber of Commerce and Industry announced on the 13th that, according to a survey of 2,208 manufacturing companies nationwide on the "2026 Economic and Business Outlook," 40.1% of respondents predicted that this year's economic trend would slow compared to the previous year.

36.3% of respondents expected the economy to remain similar to last year, while only 23.6% anticipated an improvement.

◆ Clear shift toward conservative management... Outlook darker than two years ago = The subdued sentiment among companies is clearly reflected in their management plans. When asked about the core direction of their business plans for this year, 79.4% of companies answered "maintain" (67.0%) or "reduce" (20.6%). In contrast, only 12.4% of companies were planning "expansionary management."

This marks a more conservative shift compared to the same survey two years ago, when the combined "maintain" and "reduce" responses stood at 65%.

The outlook varied by industry. In the semiconductor sector, where a recovery is expected, nearly half of companies (47.0%) chose expansionary management. The pharmaceutical and bio (39.5%) and cosmetics (39.4%) industries also showed aggressive strategies, surpassing the overall average.

On the other hand, the textile (20.0%) and steel (17.6%) sectors, which are suffering from sluggish domestic demand and low-cost overseas competition, had the highest proportion of companies planning to "reduce" their business scale among all industries.

◆ Triple risks of "exchange rate, Trump, oil prices"... Companies urge government for "exchange rate stability" = Companies cited external factors as the biggest risks to growth this year. "High exchange rates and increased volatility" ranked first at 47.3%, followed by ▲ oil and raw material price volatility (36.6%), ▲ trade uncertainty due to the inauguration of the Trump administration (35.9%), and ▲ global economic slowdown (32.4%).

Domestic risks mentioned included "strengthened legislation increasing corporate burdens" (19.4%) and "weakening of domestic demand structure due to aging population" (12.5%).

As for policies they want from the government, "exchange rate stabilization" was the most requested (42.6%), followed by domestic investment promotion (40.2%), strengthening trade response such as tariffs (39.0%), and boosting consumption (30.4%).

Kang Seokgu, head of the survey division at the Korean Chamber of Commerce and Industry, emphasized, "Despite expectations for simultaneous improvement in exports and domestic demand, cautious management will continue due to industry disparities and external uncertainties," adding, "It is urgent for government policies to provide real growth momentum through industry-specific support and bold regulatory reforms."