Korea Business Confidence


Korea: Business confidence drops to six-month low in August

July 30, 2013

The Bank of Korea's (BoK) forward-looking Business Survey Index (BSI) on business conditions in the manufacturing sector fell from 78 points in July to 73 points in August, marking the lowest level in six months. For over two years, the index has remained below the 100-point threshold that separates pessimistic and optimistic territory.

Businesses were more pessimistic about prospects in the manufacturing sector for both domestic demand-oriented and export-oriented industries. The outlook for export-oriented industries dimmed mostly due to the recent appreciation of the won against the Japanese yen stemming from Japan's massive monetary easing. Prospects for domestic-demand oriented business also decreased in August.

The BSI's current business perceptions index showed that the manufacturing sector dropped from 79 points in June to 72 points in July, amid a worsened assessment of export conditions.

FocusEconomics Consensus Forecast panellists expect fixed investment to expand 2.0% in 2013, which is down 0.2 percentage points from last month's forecast. In 2014, the panel expects fixed investment to accelerate to 3.9%.


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Korea Business Confidence Chart

Korea Business Confidence August 2013

Note: Business Survey Index (BSI). An index value above 100 indicates an optimistic outlook while a value below 100 indicates a pessimistic outlook.
Source: Bank of Korea (BoK).

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