Korea: Business confidence deteriorates in July
June 29, 2017
The Bank of Korea’s forward-looking business confidence indicator (BSI) for the manufacturing sector eased from 84 points in June to 80 points in July, marking the lowest reading since February. As a result, the indicator is now further below the 100-point threshold and signals pessimism among the majority of Korean businesses.
Looking at the results in detail, business sentiment among both export- and domestic-oriented firms deteriorated markedly in July. The former reflected a declining value of oil-related exports, while the latter stemmed from ongoing doubts regarding households’ massive debt burden. Business’ view on sales and profitability took a hit in July, while a small improvement in companies’ assessment of raw material prices did little to offset the overall decline.
Author: David Ampudia, Economist