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[Alpha Biz=(Chicago) Reporter Paul Lee] Three out of four construction companies struggling with the "double torture" of the economic recession and high interest rates are having difficulty paying financial interest costs with operating profit, a survey showed.
The Korea Business Association said on the 19th that it conducted a "Survey on the Financial Situation of the Top 500 Construction Companies in Sales" (response from 102 companies) by commissioning market research firm Mono Research.
Four out of 10 respondents said their financial situation is currently difficult, while only one out of 10 expect their financial situation to improve in the second half of this year.
When asked about the threshold for the benchmark interest rate, which can cover interest costs with operating profit, 76.4% of the respondents said they have already exceeded the threshold at the current benchmark interest rate level (3.50%). Only 17.7% of the companies said they had room at the current base rate level.
Companies cited "relaxation of interest rate burden and commission levels" (39.2%), "stabilizing raw material prices through supply chain management" (16.7%), and "deregulation for a soft landing in the real estate market" (16.7%) as policy tasks for stable fund management.
When asked about the financial situation of companies, it was followed by 'similar to the average year' (43.1%), 'difficulty' (38.3%), and 'good' (18.6%). The financial outlook for the second half of the year was also surveyed in the order of "similar" (52.9%), "worse" (33.4%) and "improvement" (13.7%), predicting that the financial difficulties in the construction sector will continue until the end of the year.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
