Corporate earnings improved in the second quarter of this year, extending beyond the semiconductor sector. While Samsung Electronics and SK Hynix significantly boosted overall performance, growth and profitability in manufacturing also showed improvement even without these companies. The semiconductor-driven economic upswing appears to be spreading across various industries, with non-manufacturing revenue growth accelerating and the construction sector returning to growth for the first time in eight quarters.
According to the Bank of Korea, the overall revenue growth rate for companies in the second quarter was 26.7% when including Samsung Electronics and SK Hynix, but dropped to 12.0% when excluding them. The operating profit margin also fell from 16.9% to 6.2%. The strong performance of the semiconductor giants is interpreted as a key factor driving the highest profitability levels for companies overall.
The impact of semiconductor companies was also significant in manufacturing. The revenue growth rate for manufacturing was 39.6% when including these two companies, but decreased to 14.0% when they were excluded. The operating profit margin dropped from 24.0% to 7.2%. However, even without Samsung Electronics and SK Hynix, revenue and profitability improved, indicating a continued recovery trend in the manufacturing sector. Notably, the revenue growth rate for manufacturing, excluding these two companies, was higher than that of non-manufacturing (9.7%).
Lee Mi-joo, head of the corporate statistics team at the Bank of Korea, stated, "The operating profit margin for manufacturing, excluding Samsung Electronics and Hynix, is 7.2%. The gap between manufacturing and non-manufacturing is not that large, and both sectors are moving in a similar direction." She emphasized that even without these companies, growth and profitability are improving across the board.
The recovery in non-manufacturing was also evident. The revenue growth rate for non-manufacturing rose from 3.7% in the previous quarter to 9.7%, an increase of 6.0 percentage points. The transportation sector improved from 8.1% to 13.6%, while retail saw an increase from 7.1% to 13.7%. The expansion of revenue growth in non-manufacturing indicates that the recovery that began in manufacturing is now spreading to the service sector.
Particularly, the increase in retail revenue is attributed to the growth of semiconductor-related distribution and the recovery of private consumption. The revenue growth rate for retail surged from 7.1% in the previous quarter to 13.7%. Some semiconductor distribution companies showed remarkable growth, while department stores and other consumer-related businesses also experienced significant revenue increases. The effects of the semiconductor boom are spreading to the retail sector, alongside a recovery in consumption-related industries.
The construction sector also showed signs of recovery. The revenue growth rate for construction improved from -4.0% in the previous quarter to 0.3%, marking a return to growth for the first time in eight quarters. This change reflects an increase in construction volume related to large-scale facility investments, such as semiconductor plants.
However, the increase in revenue has not directly translated into improved profitability. The operating profit margin for non-manufacturing slightly decreased from 5.1% in the second quarter of last year to 5.0% this year. The operating profit margin for the transportation sector fell from 7.0% to 4.8%, and the electric and gas sector dropped from 5.0% to 3.9%. In contrast, the operating profit margin for construction improved from 3.9% to 6.2%.
Business sentiment is improving. In August, the manufacturing corporate business sentiment index (CBSI) rose to 103.8, an increase of 0.6 points from the previous month. The outlook for the next month also increased by 2.0 points to 102.5. The non-manufacturing CBSI rose to 96.7, up 1.5 points from the previous month, with the outlook for the next month increasing by 3.9 points to 97.6. In non-manufacturing, improvements in revenue and financial conditions have been key factors boosting business sentiment.
Lee noted, "The 9.7% revenue growth rate for non-manufacturing is not low. In manufacturing, excluding Samsung Electronics and SK Hynix, the gap in revenue growth rates compared to non-manufacturing has significantly narrowed."
* This article has been translated by AI.
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