Despite Ongoing COVID-19, Corporate Sentiment Greatly Improves... March BSI Hits Highest Level in Over 10 Years

'March 2021 Business Survey Index (BSI) and Economic Sentiment Index (ESI)'
Economic Sentiment Index Combining Business and Consumer Sentiment Hits Highest Since May 2018

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eunbyeol] With the third wave of COVID-19 subsiding and growing expectations for vaccines, corporate sentiment in March soared to its highest level in 9 years and 8 months. The economic sentiment, calculated by adding consumer sentiment to corporate sentiment indices, also rose to pre-COVID-19 levels.

According to the "March 2021 Business Survey Index (BSI) and Economic Sentiment Index (ESI)" released by the Bank of Korea on the 31st, the overall industry business condition BSI for this month was 83, up 7 points from the previous month. The overall industry business condition BSI surged to its highest level since July 2011 (87).

The manufacturing business condition BSI rose 7 points from the previous month to 89, while the non-manufacturing business condition BSI increased by 5 points to 77. The manufacturing BSI also rose to its highest level since July 2011 (92), and the non-manufacturing BSI reached its highest level since before the COVID-19 outbreak in December 2019 (78).

Kim Daejin, head of the Corporate Statistics Team at the Bank of Korea’s Economic Statistics Bureau, explained, "The manufacturing BSI rose as steel product prices increased, with the primary metals sector up 17 points, and chemical substances and products sector rising 12 points due to higher oil prices." The semiconductor market continued its strong performance, pushing up prices of electronic components, which led to a 5-point increase in the electronics, video, and communication equipment sector.

By company size, large enterprises (+6 points), small and medium enterprises (+9 points), export companies (+3 points), and domestic companies (+11 points) all showed increases. The sales BSI rose 6 points from the previous month to 97, while the profitability BSI (85) and financial condition BSI (84) fell by 3 points and 1 point, respectively.

The non-manufacturing business condition BSI also rose 5 points from the previous month to 77, driven by wholesale and retail trade (+11 points), information and communication (+8 points), and professional, scientific, and technical services (+10 points). Kim said, "Improved consumer sentiment led to a recovery in domestic demand, which boosted sentiment in wholesale and retail trade." He added, "Increased sales of media content rights and rising demand for system software, as well as higher demand for advertising agency services and more orders for civil engineering design and supervision, also had an impact."

The outlook BSI for April rose 6 points to 84 for all industries. Manufacturing increased by 6 points to 91, and non-manufacturing rose 5 points to 78.

The Economic Sentiment Index (ESI), which reflects both the BSI and the Consumer Sentiment Index (CSI), rose 4.7 points in one month to 101.3, the highest level since May 2018 (101.9). The seasonally adjusted ESI cyclical component rose 2.8 points to 98.6, also the highest since May 2018 (98.9).

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