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Korea Business Confidence December 2019

Korea: Forward-looking manufacturing business confidence slightly more pessimistic in December

The Bank of Korea’s forward-looking business confidence indicator for manufacturers ticked down to 71 in December from 72 in November, while confidence in the non-manufacturing sector increase to 74 points in December from 72 in the month prior. Both readings remained well below the 100-point threshold separating pessimism from optimism.

The slight deterioration in business sentiment among manufacturers was led by less optimistic views towards raw material purchase prices, while businesses’ views regarding sales prices also dropped in December. That said, manufacturers were slightly less pessimistic regarding sales volumes. The Bank does not collect information about the drivers of sentiment among non-manufacturing firms.

Going forward, U.S.-China trade talks, a slowdown in global demand for tech and subdued global growth should continue to hamper business confidence and, thus, fixed investment prospects. That said, the Bank of Korea’s decision to cut rates in mid-October should support business confidence next year.

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