Korea: Forward-looking business confidence decreases for August
July 31, 2018
The Bank of Korea’s forward-looking business confidence indicator (BSI) for the manufacturing sector has registered pessimism among businesses for every month since June 2011. For August 2018, the indicator decreased substantially to 73 points from July’s 80 points. Therefore, the BSI came in below both the 100-point threshold for August, signaling another month of pessimism, and the long-run average reading of 86 points.
A breakdown of the BSI components showed that, for August, businesses in the manufacturing sector were notably more pessimistic about sales prospects. Manufacturers were also more concerned about profitability and sales prices than they were for July. However, businesses were more confident about raw material purchase prices for August.
Confidence among non-manufacturing businesses—the mainstay of the Korean economy—fell to 74 points for August from 80 points for July.
Korea Fixed Investment Forecast
FocusEconomics Consensus Forecast panelists expect fixed investment to expand 2.7% in 2018, which is down 0.1 percentage points from last month’s forecast. In 2019, the panel expects fixed investment to grow 2.8%.
Author: Edward Gardner, Economist