Reviving Corporate Sentiment: "BSI Surpasses 100 Mark for the First Time in 34 Months"

Korea Economic Research Institute Survey of 600 Major Companies
March Comprehensive Economic Outlook at 109.2

Source=Korea Economic Research Institute

[Asia Economy Reporter Kim Heung-soon] The Business Survey Index (BSI), which reflects corporate sentiment, surpassed the 100-point mark for the first time in 34 months due to expectations of economic recovery driven by global demand recovery and the commercialization of COVID-19 vaccines. This indicates that the number of companies optimistic about the economy has exceeded those pessimistic, which is expected to have a positive impact on the real economy.

The Korea Economic Research Institute (KERI), under the Federation of Korean Industries, announced on the 24th that the March BSI forecast rose 12.6 points from February's 96.6 to 109.2. This is the first time since May 2018, 34 months ago, that the BSI has exceeded the 100-point threshold. A BSI above 100 means positive responses outnumber negative ones, while below 100 indicates more negative responses.

KERI interpreted this as "In addition to the base effect from the Lunar New Year holidays and seasonal factors such as the spring peak season, COVID-19 vaccinations and global demand recovery appear to have reduced domestic companies' concerns about economic uncertainty."

By industry, manufacturing (114.0) led the upward trend with a 19.1-point increase from the previous month. The manufacturing sector recorded its highest level in 10 years since 2011 (115.7) as of March. Non-manufacturing (102.9) also rose 4.1 points from the previous month, surpassing the 100-point mark. KERI noted that key leading indicators such as the manufacturing Purchasing Managers' Index (PMI) have recently shown continuous improvement, signaling a clear rebound in the real economy.

Outlook by sector showed that among seven sectors?domestic demand (106.9), exports (106.1), investment (99.5), employment (99.5), financial conditions (100.5), profitability (103.1), and inventory (100.3; above 100 indicates excess inventory)?four exceeded the baseline. In particular, domestic demand and exports rose sharply compared to the previous month (domestic demand by 13.5 points, exports by 13.7 points). KERI explained that strong domestic sales and exports of key domestic items such as automobiles were instrumental.

However, the February actual performance (98.0) fell below 100 due to the impact of reduced operating days during the Lunar New Year holidays. All sectors recorded below the baseline: domestic demand (93.4), exports (96.7), investment (96.2), employment (96.7), financial conditions (98.0), profitability (92.9), and inventory (100.5).

Choo Kwang-ho, Director of Economic Policy at KERI, emphasized, "The real economy, which was depressed by COVID-19, is showing signs of rebound since early this year," adding, "Uncertainties related to COVID-19 still remain, so active policy formulation to enhance corporate vitality is necessary." This survey was conducted from the 15th to the 19th targeting the top 600 companies by sales, with 393 companies responding, resulting in a response rate of 65.5%.

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