Euro Crisis May Hit Korea's Shipbuilders

Eurozone fiscal crisis may damage Korea’s export-oriented industries, shipbuilding, automobile & information technology

In particular, the nation’s shipbuilding companies’ exports to the European Union are equivalent to 19.7 percent of their total production, according to a report of the Hyundai Research Institute, says 'The Korean Herald'.

Exports account for about 85 percent of the total sales for the shipbuilding sector.

Hyundai Heavy Industries, the world’s largest shipbuilder, saw its shipbuilding orders remain unchanged at $1.5 billion (1.7 trillion won) between January and April, having plunged by 70 percent over the same period last year.

In addition, major shipbuilders, including Hyundai Heavy Industries, are suffering from declining profitability as they strive to win production orders at lower bidding prices.

U.S.-based Moody’s Investors Service recently issued a negative projection about the global shipbuilding industry.

In an economic assessment gathering hosted by the Federation of Korean Industries, experts predicted the persistent eurozone fiscal woes are exerting a negative influence on the country. They added that slower than expected growth in China and the United States is weighing down growth that was originally expected to pick up pace in the second half.