Korea: Forward-looking manufacturing business confidence falls to the lowest level since February 2019 in March
February 26, 2020
The Bank of Korea’s forward-looking business confidence indicator for manufacturers decreased to 69 in March from 77 in February, while confidence in the non-manufacturing sector ticked down to 66 points in March from 79 in the month prior. Therefore, both readings remained entrenched below the 100-threshold separating pessimism from optimism.
The deterioration in business sentiment among manufacturers was led by less pessimistic views towards current sales and sales prices. The Bank does not collect information about the drivers of sentiment among non-manufacturing firms.
Going forward, a moderating global growth outlook, the outbreak of the coronavirus and political tensions with Japan should continue to hamstring business confidence and, thus, fixed investment prospects. That being said, the Bank of Korea’s accommodative stance should support business confidence this year.
Author: Steven Burke, Economist