Facility loans to real estate sector exceed those to manufacturing
Facility loans that went into real estate exceeded those invested in the manufacturing sector for the first time this year, data by the central bank showed.An economic data system operated by the Bank of Korea (BOK) showed the loan balance for the country’s property business stood at 136.5 trillion won in June, compared to 133.4 trillion won for manufacturing.
The amount is the largest tallied for the real estate sector since the BOK started compiling related data under the current calculating system in 2008.
A facility loan is money borrowed by developers for various building projects. The numbers of such loans have risen steadily since 2014 when restrictions were eased. Facility loans by manufacturers are usually used to buy the factories and machinery needed to make goods.
The latest data showed that while the increase in facility loans by property developers reached a high of 11.3 trillion won in the January-June period, corresponding numbers for the manufacturing sector grew just 2.3 trillion won.
“Loans going to the manufacturing sector have been in minus territory for six straight months since March of this year according to the country’s industrial output numbers released by Statistics Korea,” a BOK source said. This is the longest contraction since the 10 months of negative growth reported from September 1997, when the country was hit hard by the Asian financial crisis.