S.Korea firms 2009 investment to fall 7 pct-survey

Capital expenditure by South Korean companies is expected to fall 7.3 percent this year, the first annual decline since 2002 after the IT bubble burst, state-run Korea Development Bank (KDB) said on Sunday.

Capital expenditure by South Korean companies is expected to fall 7.3 percent this year, the first annual decline since 2002 after the IT bubble burst, state-run Korea Development Bank (KDB) said on Sunday.

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Depressed demand following the global recession and uncertainties over the economy's future were cited as key reasons for sluggish corporate spending, a KDB survey showed.

South Korean corporate capital expenditures grew 4.4 percent and 4.5 percent in 2007 and 2008, respectively. Investment by manufacturing companies is seen at 42.9 trillion won ($32.3 billion), down 17.4 percent from 2008, as downturn-hit technology and auto industries curtail spending.

Technology companies are planning to invest only half the amount of last year's as memory chip and flat-screen industries suffer a severe market downturn.

But steel and refining sectors are set to increase capital expenditures by about 50 percent each on new production facility, the bank said.

Capital expenditure by non-manufacturing companies is set to rise 7.1 percent this year to 39.2 trillion won helped by spending in power generation and green energy, the KDB said.