Samjong KPMG smart office / Courtesy of Samjong KPMG

By Yoon Ja-young

Despite the current economic uncertainties, some industries will see more demand in the latter half of next year thanks to the recovery that is forecast to follow the shift to managing COVID-19 as endemic and an expansion of the market, Samjong KPMG noted in a report.

The accounting firm released its 2023 outlook for the major industries, Wednesday, where it gave a partially positive outlook for 12 industries. They are: smartphones, automobiles, petrochemicals, energy, pharmaceuticals, airlines, tourism, games, media, retail, cosmetics and non-life insurance.

In case of the gaming industry, which is relatively less sensitive to macro-economic conditions, major game companies are scheduled to release new games, it noted. "The local gaming industry will diversify their platforms, with major game companies aggressively tackling overseas markets by releasing console games." It advised that investments and M&As should be considered in the gaming industry for more diversity in platforms, regions and genres, as there will be moves to diversify income sources.

Despite negative consumer sentiment due to worries of an economic recession, the report expected exports of Korean content as well as investments to continue expanding. It recommended partnerships with overseas players as well as strengthening ICT capability for expansion into other industries.

Regarding smartphones, the market is expected to grow slightly in 2023. "With some negative factors such as the COVID-19 pandemic and geopolitical risks easing, the market may grow on the release of new products such as foldable smartphones and wearable devices," it noted.

Demand for energy is expected to increase 2.2 percent next year here. The accounting firm expected renewables and nuclear to lead the energy consumption increase, while demand for gas will inch down on the unprecedentedly high prices. It advised investments in next-generation nuclear power plants, as well as diversifying gas imports for a stable energy supply.

The non-life insurance industry saw its loss ratio fall thanks to the extension of the social distancing measures, and the industry is expected to continue growth in 2023. Samjong KPMG, however, stressed that they should focus on maintaining the soundness of their assets amid the economic slowdown as well as use channels that are efficient in the digital era.

Meanwhile, semiconductors, displays, steel, shipbuilding and the marine industry, the food and restaurant industry, fashion, banking, credit cards and life insurance were cited as industries with a negative outlook next year. Noting that the global semiconductor market is feared to see negative growth next year, the report advised redesigning the global value chain as well as managing risk by monitoring the semiconductor industry development plans of major countries.

Local display companies are expected to focus on the development of next-generation displays while withdrawing from the LCD market. The report advised setting up new competition strategies such as the further development of OLED technology and premium display lineups while strengthening stability by expanding supply chains to numerous global firms.

The construction industry is expected to see a downturn in 2023 as the government has slashed the social overhead capital budget for infrastructure investments while the interest rate is rising, adding to financing costs. It stressed that firms invest into digital processes as well as nurture their competitive edge in the transition to environmentally friendly, low-carbon methods.

"Despite extreme global uncertainties, there do exist recovery factors. Local businesses are advised to closely monitor policy changes in each industry, and advance into the global market while strengthening digital and ESG strategies for improve their competitive edge," it noted.