Korea’s business sentiment among manufacturers continue to remain weak in April

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South Korea’s business sentiment in the manufacturing sector continued to remain sluggish in April amid the ongoing economic uncertainties.

According to the Bank of Korea’s business survey index (BSI) released Thursday, the business sentiment among manufacturers remained unchanged from the previous month at 70 in April. The manufacturing sentiment fell to its lowest level in nearly 3 years in February at 63 before improving slightly to 70 in March and April.

The BSI assesses how companies judge the current business environment and their outlook based on a survey. A reading below 100 means that there are more pessimists than optimists.

The latest survey was conducted on 3,255 companies from April 12 to 19, where 2,753 companies including 1,653 manufacturing companies and 1,100 non-manufacturing companies responded.

The business sentiment among electronics, videos, and communication device manufacturers fell 3 points and that among primary metal players 9 points on falling steel product prices.

The BSI of chemical materials and products manufacturers, on the other hand, rose 8 points amid growing global demand. The reading for the automotive industry also went up by 6 points on improved production and exports of high-cost environmentally-friendly vehicles.

The business sentiment among large manufacturing companies fell 1 point but that among small- and mid-size companies rose 2 points.

[Photo by Lee Seung-hwan]

“The BSI is rising more among small and medium-sized enterprises (SMEs) than large companies, and among non-exporters than exporters,” said Hwang Hee-jin, head of the statistical research team at BOK’s economic statistics department. “The business sentiment of exports and large companies remains weak amid the growing trade deficit but the reading among chip equipment manufacturers and primary metal manufacturers improved among SMEs.”

The BSI among non-manufactures stood at 74 in April, unchanged from March.

The BSI of transportation rose 7 points on a rise in new engineering orders on the back of seasonal demand. The sentiment of business facility management, business support, and rental service also went up by 4 points in April as overall activity increased.

The reading of wholesale and retail sectors, on the other hand, fell 4 points, and that of information and communications business 6 points.

The BSI of the overall industry came to 72, remaining flat from March.

For the coming month, the BSI of the overall industry rose 1 point to 74. Manufacturers’ confidence improved 3 points from 72 and non-manufacturing 1 point from 76.

The economic sentiment index (ESI), which reflects the consumer sentiment index in the BSI, rose 2.3 points to 93.8 in April.

The cyclical ESI, which removes seasonal factors, fell 0.8 point to 90.1.