Business Confidence Survey 2018 – German Business in Korea
The Korean-German Chamber of Commerce and Industry has compiled the survey results provided by German companies who participated in the joint Business Confidence Survey 2018.
This summary of the Business Confidence Survey 2018/19 is a compilation of the survey results provided by German companies who participated in the joint Business Confidence Survey 2018 which was conducted by ECCK, KGCCI and ten further European chambers and councils in Korea. In total, 129 European companies took part in the survey, among them 53 German companies.
The South Korean economic growth rate slowed to 2.6% in 2018, 0.5 percentage points less than 2017. In this market environment, German companies remain fairly content about their performance in the Korean market, which 26% characterize as increasingly important, while 57% indicate that the level of importance remains unchanged. 49% of the respondents plan to expand their operations in Korea in 2019.
However, among German companies in Korea, regulatory obstacles such as ambiguous rules and their discretionary enforcement, economic nationalism as well as licensing and certification rules persist as severe business challenges. Furthermore, macroeconomic challenges such as slowing economic growth and rising labour cost impact German companies’ business in Korea.
Concerning the business outlook for German respondents’ respective industry, the share of companies being optimistic about their industry’s growth has declined, while pessimism regarding the development of labour cost has further accelerated as compared to last year. The Korean government raised the minimum wage by 16.4% in 2018 and announced plans to further increase minimum wages in the coming years. 77% of the German respondents thus indicated to be pessimistic amid the future wage development.
KGCCI hopes to provide a contributive summary of the sentiment of the German business in Korea to inspire constructive discussions between Korean and German stakeholders.