Business confidence in South Korea has witnessed a notable uptick in May 2024, buoyed by a resurgence in export sales, according to a survey released by the Bank of South Korea (BOK) today.
The survey results reveal a marked improvement in South Korea’s Business Sentiment Index (BSI), reaching 73 in May, compared to 71 in April. The BSI serves as a gauge of companies’ outlook on business conditions for the upcoming month. While the index remains below 100, indicating a prevalence of negative sentiment among entrepreneurs, the uptick reflects growing optimism amidst favorable export trends.
The BOK attributes the enhanced business confidence to the sustained recovery in export sales, which have offset the adverse effects stemming from a slowdown in private spending.
Breaking down the BSI by sector, the manufacturing industry recorded a BSI of 74 in May, marking a 1-point increase from April. Similarly, the non-manufacturing BSI surged to 71, climbing by 2 points compared to the previous month.
South Korea’s export sector has showcased resilience, witnessing growth for the sixth consecutive month in March. The surge in export performance has been particularly driven by robust chip exports, bolstering the country’s trade balance.
On a year-on-year basis, South Korea’s exports surged by 3.1% to reach US$56.5 billion in March, while imports declined by 12.3% to US$52.2 billion. Consequently, South Korea maintained a trade surplus for the tenth consecutive month, with the latest surplus standing at US$4.28 billion.
The positive trajectory in business confidence, fueled by export recovery, underscores South Korea’s economic resilience and its capacity to navigate through external challenges. As businesses remain cautiously optimistic about future prospects, the export-driven recovery serves as a beacon of hope for sustained economic growth in the coming months.