Korea: Business inches up in January
December 27, 2013
The Bank of Korea's (BoK) forward-looking Business Survey Index (BSI) on business conditions in the manufacturing sector edged up from 78 points in December 2013 to 79 points in January. December's result had marked the first drop following three consecutive months of improvement. Despite the increase in January, the indicator remains well below the 100-point threshold that separates pessimistic from optimistic territory.
January's increase mainly reflects improving business prospects for export-oriented businesses, while prospects for locally-oriented businesses were more pessimistic. Moreover, businesses' prospects for future sales remained unchanged, which resulted in no change to expected earnings compared to the previous month. According to the BSI's current business situation index, business confidence in the manufacturing sector fell from 78 points in November to 76 points in December.
FocusEconomics Consensus Forecast panelists expect fixed investment to expand 3.0% in 2014, which is up 0.4 percentage points from last month's forecast. In 2015, the panel expects fixed investment to accelerate to 3.7%.
Author: Ricardo Aceves, Senior Economist