The Bank of South Korea (BOK) has released its latest survey results, indicating that business confidence in South Korea has remained largely unchanged for the month of October. This stability in sentiment comes in the face of ongoing challenges related to the country’s exports of crucial products.
The South Korean Business Sentiment Index (BSI) for domestic companies has recorded a figure of 73 for October, mirroring the sentiment from the previous month. It’s important to note that an index reading below 100 signifies that there are more entrepreneurs expressing a negative view of the economic situation compared to those with a positive outlook.
The BOK’s assessment points to the fact that business confidence for October continues to lag below the historical average. This subdued sentiment can be attributed to disruptions in the export of vital products such as semiconductors, automobiles, and communication equipment to international markets.
For manufacturers, the BSI stands at 67 for October, marking a 2-point decline from the previous month’s reading. Conversely, non-producers have seen a slight uptick in sentiment, with their BSI rising by 1 point to reach 77 during the same period.
Interestingly, the actual BSI reading for September was 73, reflecting a 2-point increase compared to August. This represents the first positive shift in sentiment observed in the past three months.
South Korea continues to grapple with a combination of weak exports and sluggish private consumption. The export sector has faced significant challenges, with August witnessing an 8.4% year-on-year decline in exports to foreign countries. This marked the 11th consecutive month of export contraction.
The BSI findings are based on a survey conducted between September 12th and 19th, encompassing responses from 3,255 companies, including 1,607 manufacturers. These insights provide a snapshot of the economic sentiment prevailing in South Korea, highlighting the persistence of challenges in key sectors and the need for strategies to stimulate growth and recovery.