As the decline in manufacturing employment continues, a narrow recovery is expected in the second half of this year, primarily driven by the semiconductor and shipbuilding sectors. The benefits of increased investment in artificial intelligence (AI) and strong export and order performance are concentrated in certain industries, making widespread recovery in manufacturing unlikely.
According to the "2026 Second Half Employment Outlook for Major Industries" report released on August 19 by the Korea Employment Information Service and the Korea Industrial Technology Promotion Agency, employment in the semiconductor and shipbuilding sectors is projected to increase compared to the second half of last year, while textile jobs are expected to decline.
Six other sectors, including machinery, electronics and displays, steel, automotive, metal processing, and petrochemicals, are anticipated to maintain similar employment levels to the previous year. This forecast is based on data from employment insurance subscribers.
By sector, the semiconductor industry is expected to see the highest employment growth rate at 5.1%, with approximately 8,000 new jobs anticipated compared to the second half of last year. Analysts attribute this growth to the booming high-value memory market driven by AI market expansion and increased exports.
Employment in the shipbuilding sector is also projected to rise by 2.7% (3,000 jobs) compared to the previous year. The continued delivery of high-value vessels, such as LNG carriers and large container ships, is expected to boost both exports and employment. As of May, the domestic shipbuilding industry's order backlog stood at 38.5 million CGT, securing more than three years' worth of work.
Excluding semiconductors and shipbuilding, no significant recovery in employment is expected in other sectors. While machinery is projected to see a slight increase of 0.8% in jobs compared to the second half of last year, sectors such as electronics and displays (-0.1%), steel (-0.3%), automotive (-0.5%), metal processing (-0.3%), and petrochemicals (-0.6%) are expected to experience slight declines.
The Employment Information Service classifies employment changes as 'increase' if the growth rate is above 1.5% compared to the previous year, 'maintain' if it is between -1.5% and 1.5%, and 'decrease' if it is below -1.5%. Accordingly, the six sectors, including machinery, which are expected to see slight increases, are all classified as 'maintain.'
Particularly, the textile industry is expected to continue facing employment challenges in the second half of the year. Textile employment is projected to decrease by 3.5% (5,000 jobs) compared to the previous year, making it the only sector classified as 'decrease' among the nine industries.
The employment growth rate in the textile sector has recorded declines of -3.7% in the first half of 2024, -3.6% in the second half of 2024, and -3.6% in both halves of last year. In the first half of this year, the workforce decreased by approximately 3.0% (4,000 jobs) compared to the previous year, totaling around 142,000 workers.
While there is potential for domestic recovery due to increased production of advanced materials and improved consumer sentiment, challenges such as supply chain shocks from the Middle East, U.S. trade regulations, and competition from low-priced Chinese products are expected to hinder recovery in exports and employment.
This disparity among sectors is also reflected in recent manufacturing employment trends. According to the Ministry of Employment and Labor's "July 2026 Employment Administrative Statistics on Labor Market Trends," the number of manufacturing employment insurance subscribers decreased by 3,000 compared to the same month last year, marking a 14-month consecutive decline.
Specifically, the number of subscribers in the electronics and communications manufacturing sector increased by 4,600, with semiconductors alone seeing a rise of 6,200 (5.9%). Special-purpose machinery, which includes semiconductor equipment, also added 1,900 jobs. The other transportation equipment sector, which includes shipbuilding, saw the largest increase in manufacturing, with 6,400 new jobs. The ship and boat building sector increased by 4,800 jobs, marking 44 consecutive months of growth.
In contrast, the automotive manufacturing sector saw a decrease of 2,400 jobs, expanding its decline since March. The chemical products sector lost 2,900 jobs, while electrical equipment saw a reduction of 2,000 jobs, marking 15 consecutive months of decline.
Looking ahead, while the semiconductor and shipbuilding sectors are expected to benefit from AI investment and strong exports, sectors such as automotive, petrochemicals, and metal processing are likely to stagnate or see slight declines, indicating that the recovery in manufacturing employment will continue to be concentrated in a few industries.
A government official commented, "Some sectors with strong exports are doing relatively well, but the rest are still struggling, leading to a polarized situation."
* This article has been translated by AI.
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