Korean Export Outlook for Q3 Indicates Continued Improvement Amid Stabilization Efforts

The Korea International Trade Association (KITA) announced on the 28th that, following nearly $400 billion in cumulative exports by May 2023, the export industry is expected to continue its upward trajectory in the third quarter. This positive outlook is heavily influenced by the resilience of core sectors such as semiconductors and wireless communication devices, which are driving improvements despite previous disruptions from geopolitical tensions in the Middle East.

KITA’s Economic and Trade Research Institute’s report on the Q3 2026 Export Industry Business Survey Index (EBSI) indicates that the EBSI is projected to reach 107.0, surpassing the baseline of 100 for the fourth consecutive quarter. While several industries remain below this threshold, the consistent performance of pivotal sectors, including semiconductors and shipbuilding, is reaffirmed as vital to Korea's export resilience.

Among the 15 major product categories surveyed, four—including semiconductors—are expected to see improved export conditions. Notably, the semiconductor category is rated at 142.6, capitalizing on stable demand for server DRAM despite recent price increases. This reflects the broader trend of rising demand for high-performance SSDs driven by tight HDD supply, suggesting ongoing revenue potential in this high-value segment.

Conversely, the electronics segment, rated at 74.1, faces challenges as intensified pricing competition with Chinese battery manufacturers and rising costs for OLED components deteriorate export prospects. The plastic, rubber, and leather products category is similarly hindered, with sustained high raw material prices spurred by the Middle East situation limiting its export capacity.

The survey revealed a promising shift in nine out of ten assessed factors, with notable gains in manufacturing efficiencies and export consultation metrics. The supply and sourcing conditions indicator clocked in at 111.4, buoyed by easing tensions in the Middle East, showcasing a significant rebound from the previously low quarter. This represents the highest level recorded since Q4 2017, signaling improved operational resilience and potential for future engagement with international partners.

Exporters cited raw material price hikes (24.7%) and rising logistics costs (17.9%) as the primary hurdles for Q3, underscoring the need for strategic procurement practices within the context of fluctuating global conditions. These factors are critical, as they not only affect direct costs but also influence the broader pricing strategies across product ranges.

KITA's Chief Researcher, Lee Gwan-jae, emphasized that the expected improvement in Q3 export conditions is attributed not only to solid performance in IT products but also to the normalization of procurement and production conditions previously affected by geopolitical instability. However, he cautioned that volatility in oil prices, exchange rates, and logistics costs could persist, necessitating rigorous oversight in purchasing and contract management to navigate the evolving landscape effectively.