NABO Industry Trends and Issues (No. 22)
Published on 25 July 2019
Published by Industry & Employment Analysis Division of the Economic Analysis Bureau
Ⅰ. Industry, Trade, Industrial Loans and Energy Market Trends
(Industry and Trade) Manufacturing production in May 2019 decreased by 0.1% from the same month in the previous year, while total exports and the exports of 11 major industries fell by 13.5% and 25.7% from the same month in the previous year, respectively, due to the continued US-China trade dispute and a slowdown in global trade.
(Industrial Loans) The volume of industrial loans in the first quarter of 2019 increased by 6.6% YoY, due to an increase in the services sector (9.0%), as well as in the manufacturing sector (2.8%), construction sector (1.6%) and other sectors(7.2%). Loans granted by bank depository institutions increased by 4.9% to 898.8 trillion won whereas loans granted by non-bank depository institutions increased by 13.7% to 242.1 trillion won.
(Energy) International oil prices reached 59.8 dollars per barrel in June 2019, a 17% drop from the same month in the previous year, while international coal prices also declined. The energy import volume in the first quarter decreased 3.5% YoY, and the primary energy supply decreased by 8.5% overall, with coal and petroleum supplies decreasing by 12.3% and 118.6%, respectively. Power generation plant equipment produced a record output (119GW) as of the end of June.
Ⅱ. Domestic and International Comparison of the Asset Allocation and Return Ratio of the National Pension Service (NPS) Fund
NPS recently established the (Tentative) Medium-Term Asset Allocation of the National Pension Fund for 2020-2024 as part of a strategy to improve long-term investment returns by reducing the weight of fixed income assets while increasing the weight of alternative investments and foreign assets. In this regard, a strategy is required to adjust asset allocations to respond to external economic uncertainties and the long-term financial outlook of the NPS fund. A comparative analysis of major pension funds and credit union funds concluded that the NPS fund has a relatively high weight of fixed assets among its asset category, low volatility in fund management and reasonable risk-adjusted returns, but is lacking in terms of cumulative returns.
Ⅲ. International Comparison of Childcare Leave Systems and the Status of Their Usage
Most advanced countries including Korea have implemented a childcare leave system to support the work-life balance of parents with young children. Fewer Koreans go on childcare leave compounded by low average monthly wages compared to Sweden and Germany, and the ratio of men participating in childcare leave is relatively lower than women both in Sweden and Germany. Given these circumstances, the economic burden that undermines the use of childcare leave is expected to be lifted by developing measures against the income decrease brought on by childcare leave. Also, in terms of the length of childcare leave, fathers can be encouraged to more actively utilize childcare leave via institutional improvements.