"Manufacturing 'Held Up' in Q4 Last Year, 'Rebounds' This Year...Semiconductors & Secondary Batteries Up"

This Year’s Refining 'Clear' Secondary Batteries, Semiconductors, Wireless Communication Devices, and Biohealth 'Gam'

[Asia Economy Reporter Moon Chaeseok] Manufacturing business conditions and sales improved in the fourth quarter of last year compared to the previous quarter. The outlook for the first quarter and the entire year of this year is expected to rebound by overcoming the impact of the novel coronavirus disease (COVID-19). It is anticipated that high value-added information and communication technology (ICT) sectors such as semiconductors and secondary batteries will lead the recovery.

According to the Manufacturing Business Survey Index (BSI) released by the Korea Institute for Industrial Economics and Trade on the 17th, the manufacturing business condition BSI for the fourth quarter of last year was 92, and the sales BSI was 96, rising 8 points and 12 points respectively from the previous quarter.

The BSI uses 100 as the baseline; a value above 100 indicates a more optimistic outlook for the economy compared to the previous quarter, while a value below 100 indicates the opposite. The BSI survey, conducted from December 10 to 30 last year, received responses from 1,009 domestic manufacturing companies.

By category, domestic demand (96) rose 11 points from the previous quarter. Exports (94) increased by 3 points, and facility investment (100) rose by 1 point. Employment (98) also increased by 1 point but remained below the baseline of 100.

The outlook for the first quarter and the entire year of this year was surveyed to be positive.

The business condition for the first quarter of this year is 92, and sales are 94, rising 4 points and 5 points respectively from the previous quarter.

Domestic demand (94) and exports (97) increased by 6 points and 5 points respectively. Employment (101) rose by 4 points, expected to exceed 100. Facility investment (99) increased by 2 points but remained below the baseline.

The annual BSI outlook for this year is 99 for business conditions and 103 for sales. Many companies expect the overall economy to improve, with domestic demand (103), exports (108), facility investment (102), and employment (104) all showing positive forecasts.

By industry, sales outlooks were highest in the order of petroleum refining (122), secondary batteries (114), semiconductors (113), wireless communication devices (111), and biohealth (110).

The petroleum refining sector's outlook is analyzed as a base effect due to the decline in oil prices throughout last year caused by reduced demand from the COVID-19 impact.

However, the expectation that high value-added ICT sectors such as semiconductors will lead the economic rebound is interpreted positively.

This content was produced with the assistance of AI translation services.