Korea’s business confidence drops to 18-month low

Korea’s business confidence drops to 18-month low [Photo by MK DB]

Korean business sentiment dropped to the lowest level in 18 months as global economic uncertainty drags on.

The business survey index (BSI) for February recorded 83.1, the lowest since August 2020, according to the Federation of Korean Industries on Thursday. The index measuring corporate sentiment for business conditions for the following month has remained below 100 for 11 months since April. A reading below 100 means pessimists outnumbers optimists.

The readings of both manufacturers and non-manufacturers recorded below 100 for the ninth consecutive month.

The BSI of manufacturers was 81.4 with those of electronics/network devices, petrochemical and automobiles and other transportation remaining subdued for a fifth consecutive month. Those sectors are the country’s main exporters, driving economic growth.

Non-manufacturer BSI recorded 85.1, with only public utility staying above 100. The confidence level of telecommunication service providers plunged by 30.9 points from a month earlier due to global IT market slowdown.

Pessimism dominated across all areas. Confidence level for capital was 87.9, investment 89, profitability 89.5, domestic demand 89.5, exports 90.9 and hiring 96.0. Inventory index recorded 105.4, suggesting that businesses are struggling with high stockpiles.

The survey was conducted on the country’s top 600 companies by sales from Jan. 5 to 12. A total of 373 companies took part of the survey.