Korea: Business confidence unchanged for January, propped up by the domestic economy

The Bank of Korea’s forward-looking business confidence indicator (BSI) for the manufacturing sector remained unchanged from December for January at 82 points. As a result, the indicator sat below the 100-point threshold for January, signaling another month of pessimism among Korean firms.

Although the BSI was unchanged overall for January, the index components varied: Business sentiment among export-orientated firms deteriorated for the month, while domestic-orientated firms reported an improvement. Businesses grew more optimistic regarding sales volumes and input prices in January, but less positive regarding sales prices. Profitability, meanwhile, was expected to be no different in January than in December.

Non-manufacturing businesses—the mainstay of the Korean economy—reported weaker confidence for January than they did for December.

FocusEconomics Consensus Forecast panelists expect fixed investment to expand 2.3% in 2018, which is up 0.1 percentage points from last month’s forecast. In 2019, the panel expects fixed investment to again grow 2.3%.