South Korea’s automobile industry is feared to fare worse next year because of the global economic slump, while its IT, machinery and shipping sectors will likely perk up, a report said Sunday.

Automakers are expected to enter a contractionary phase as worldwide demand will likely falter on the protracted economic downturn and global competition get fiercer, according to the report by the Hyundai Economic Research Institute.

The report said although the U.S. Big Three ― Ford, Chrysler and General Motors ― will likely get back on track for expansion, local carmakers are feared to see worsening performances.

Local steelmakers, shipbuilders and construction companies are among those forecast to suffer from a slowdown, the report said, citing an oversupply which is expected to dent overall demand in those industries.

“With industrial recovery coming at a slow pace, domestic-oriented firms such as services and construction companies will also likely see poor results,” the report noted.

In contrast, IT companies are projected to gain steam from next year, with shipping lines likely to see a brisk growth on an increase in exports to emerging nations.

The research firm picked the petrochemical sector as the one to flourish most next year on the back of growing demand in China.

As there will be a widening gap between firms doing well and those faring worse, the government should come up with different exporting strategies for industry types as well as plans to boost the domestic economy, the report added. (Yonhap News)