Korea’s manufacturing sentiment at a 2-yr high in June on strong chip demand

[Graphics by Song Ji-yoon]

South Korea’s manufacturing sentiment rose to its highest level in nearly two years in June, driven by strong chip business. Corporate perception of the overall economy also improved for the fourth consecutive month.

According to data released by the Bank of Korea (BOK) on Thursday, the business sentiment index (BSI) of the manufacturing sector in June rose by 3 points from the previous month to 97.4, marking the third consecutive month of increase.

Although the manufacturing index hit an all-time high since 102.1 in August 2022, it was still below the benchmark of 100, indicating a prevailing pessimistic outlook.

[Source: Bank of Korea]

The BSI in all industries came in at 95.7 in June, up 2.8 points from the previous month.

Despite remaining below 100, the index has been on an upward trend since March.

The June BSI survey showed significant improvements particularly in chemicals and chemical product sectors, with business conditions rising by 13 points and financial conditions improving by 10 points.

This improvement is attributed to the increased export demand for cosmetics and the rising demand for industrial chemical products, experts say.