Korea Business Confidence September 2016

Korea

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.

FocusEconomics Consensus Forecast panelists expect fixed investment to expand 2.8% in 2016, which is up 0.2 percentage points from last month’s forecast. For 2017, the panel also expects fixed investment to increase 2.8%.


Author:, Senior Economist

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Korea Business Confidence September 2016

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


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