Korea: Business confidence rises in September
August 31, 2016
The forward-looking business confidence indicator (BSI) for the manufacturing sector produced by the Bank of Korea (BoK) jumped from 71 points in August to 74 points in September. This marked a four-month high, but the indicator remains well below the 100-point threshold that signals that businesses are more pessimistic than optimistic.
Looking at the details, economic sentiment among both export-oriented businesses as well as domestic market-oriented manufacturing companies improved over the previous month. The survey also showed that firms were more optimistic regarding higher sales in September. This can be attributed in part to seasonal factors, due to the upcoming Chuseok, or traditional Korean Thanksgiving holiday, which falls on 15 September this year. Meanwhile, companies’ profitability expectations increased while their expectations of higher raw material costs dropped over the previous month.
Author: Ricardo Aceves, Senior Economist