Korea: Forward-looking manufacturing business confidence yet more pessimistic for November
October 29, 2019
The Bank of Korea’s forward-looking business confidence indicator for manufacturers edged down to 72 in November from 73 in October, while confidence in the non-manufacturing sector also decreased to 72 points in November from 74 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 and volumes also dropped in November. That said, manufacturers were slightly less pessimistic regarding profitability. The Bank does not collect information about the drivers of sentiment among non-manufacturing firms.
Going forward, uncertainty regarding U.S.-China trade talks, heightened political tension with Japan and slowing global growth will continue to depress business confidence. That said, the Bank of Korea’s decision to cut rates in mid-October should support fixed investment next year.
Author: Stephen Vogado, Economist