Korea Business Confidence February 2020


Korea: Forward-looking manufacturing business confidence less pessimistic in February

January 30, 2020

The Bank of Korea’s forward-looking business confidence indicator for manufacturers increased to 77 in February from 73 in January, while confidence in the non-manufacturing sector ticked down to 74 points in February from 75 in the month prior. Nevertheless, both readings remained well below the 100-threshold separating pessimism from optimism.

The slight improvement in business sentiment among manufacturers was led by more optimistic views towards and sales prices, while businesses’ assessment of raw material purchase prices also improved in January. The Bank does not collect information about the drivers of sentiment among non-manufacturing firms.

Looking ahead, an uncertain 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 ongoing accommodative stance should support business confidence this year.

FocusEconomics Consensus Forecast panelists expect fixed investment to increase to 1.2% in 2020, which is up 0.1 percentage points from last month’s projection. In 2021, the panel expects fixed investment to grow 2.3%.

Author:, Economist

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