Yeosu Chamber of Commerce and Industry Forecasts Recovery Trend in Manufacturing Companies' Q2 Business Conditions

Q2 Corporate Business Sentiment Index Rises 26.3 Compared to Last Quarter
Since Q1 Last Year, Declining Sentiment Shifts to Positive Trend Mainly in General Industries
General Industries Record First Positive Value Above 100 Benchmark (103.2)

BSI Trend (Q3 2019 ~ Q2 2021), Provided by Yeosu Chamber of Commerce and Industry

[Asia Economy Honam Reporting Headquarters Reporter Lee Hyung-kwon] The Yeosu Chamber of Commerce and Industry in Jeonnam (Chairman Lee Yong-gyu) released on the 5th the business outlook survey (BSI) forecast for the second quarter of this year targeting 186 manufacturing companies in the region. (Response rate 38.2%)

According to the survey results, the business sentiment index (BSI) for the second quarter of this year was measured at '91.5', which is a value smaller than the baseline value of 100 for the business sentiment index (meaning the business sentiment is the same compared to the previous quarter), indicating a "negative" result.

However, the Yeosu Chamber of Commerce attributed significance to the fact that this is the first result since the COVID-19 situation in the second quarter of last year showing an upward trend exceeding 90.

Also, one of the characteristics of this survey result is that the fluctuation in sentiment in the petrochemical-related industries was not as large compared to general industries.

The Yeosu Chamber analyzed that the reason for the small fluctuation (86.5 → 82.5) in the petrochemical-related industries is due to international factors such as the unusual cold wave in the U.S. causing a decline in crude oil supply capacity, and the Middle East's oil production cuts, which stabilized the previously excessive crude oil supply, leading to oil price increases (oil price recovery), resulting in an improvement in operating profits in the petrochemical industry.

On the other hand, from the demand side, amid prolonged concerns about the still unrecovered economic recovery, negative outlooks blocking crude oil demand such as the electric vehicle issue are still circulating. In the case of petrochemical-related industries, supply showed positive signals while demand still showed negative signals, and these results likely influenced the magnitude of the change. (86.5 → 82.5, 4 decline)

Meanwhile, the business outlook index for general industries rose sharply compared to the previous quarter, driven by increased expectations for economic recovery due to the full-scale COVID-19 vaccination rollout. (40.6 → 103.2, 62.6 increase)

A representative from the Yeosu Chamber said, "This business sentiment survey result shows that the continuously declining sentiment since the first quarter of last year has shifted to an upward trend mainly in general industries," adding, "It is noteworthy that the general industries showed a positive figure exceeding the baseline value of 100 after the COVID-19 phase."

Also, the results of the impact survey conducted along with the business outlook survey are as follows.

In response to the question, "What external risk do you expect to have the greatest impact on your company this year?" the answers were oil price increase (36.8%), exchange rate volatility (21.1%), emerging market economic recession (14.7%), and U.S.-China trade conflict in order.

And to the question, "What internal risk do you expect to have the greatest impact on your company this year?" the responses were COVID-19 resurgence (45.7%), possibility of domestic interest rate hikes due to normalization of major countries' monetary policies (19.0%), legislation of corporate burden bills (19.0%), and increase in household debt (9.5%).

Also, to the question, "What changes do you think COVID-19 has brought to the technology gap between advanced countries and our companies?" the answers were no change (52.1%), decreased (25.4%), and increased (22.5%) in order.

To the question, "How did your performance last year change compared to the year before last?" the responses were somewhat worsened (47.9%), similar to this year (32.4%), and very worsened (19.7%) in order.

Finally, to the question, "Assuming there is no COVID-19 resurgence, when do you expect your performance to recover to pre-COVID-19 levels?" the answers were possible only after next year (76.5%), within this year (20.6%), and within the first half of the year (2.9%).

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