Most South Korean industries are likely to see a modest recovery next year, with rechargeable batteries, automobile and shipbuilding sectors expected to show robust growth, according to a think tank Wednesday.

The Hana Institute of Finance stressed the need to prepare for China's slowing growth, strengthening of global environmental regulations and new technological advances that it said will have mid- and long-term effects on local industries.

"Local industries are generally expected to show a recovery trend next year," it said.

But, it added, "It is difficult to expect dramatic improvements as most industries except for secondary battery, automobile and shipbuilding will see recovery on a low base effect."

For instance, the rechargeable battery sector is expected to spearhead a recovery in both the size and profitability of the parts and materials sector based on its large order backlog.

The semiconductor industry will continue to see difficulties due to slow demand, but a recovery in prices may lead to improvements, the report said.

The petrochemical industry, on the other hand, is expected to see a "severe recession" due to slowing demand, high oil prices and oversupply.

The report highlighted that most local industries are exposed to mid- and long-term effects of changes in China's economic growth, global environmental regulations and new technologies.

"The China issue will have a direct impact in the short-term while the strengthening of global environmental regulations may become an issue that decides the growth and very survival of businesses over a long period of time although their short-term effect may be minimal," said the report, stressing the need for "more active measures."

"The application of new digital technologies may be low in the near term but will grow to become a whole new industry of its own as it spearheads growth of the digital industry over the long term," it added. (Yonhap)