Gwangyang Chamber of Commerce, Local Companies' Business Outlook Index for Q3 2021 at 109.6

Corporate Business Outlook Index Hits Highest Level in 8 Quarters

[Asia Economy Honam Reporting Headquarters, Reporter Heo Seon-sik] The Gwangyang Chamber of Commerce and Industry in Jeonnam (Chairman Lee Baek-gu) conducted the '2021 3rd Quarter Business Outlook Survey' targeting about 100 local companies, and the Business Survey Index (BSI) was recorded at 109.6, indicating optimism for the second half of the year.

This figure represents a 25.7-point increase compared to the previous quarter's 83.9, marking the highest level in eight quarters.

The reasons for the outlook include positive expectations accounting for 76.9%, such as 'economic conditions continuing for the time being (42.3%)' due to COVID-19 vaccine rollouts, export growth, and policies to stimulate domestic demand, 'improvement in business conditions (23.1%)', and increased orders (11.5%).

The Business Survey Index (BSI) quantifies the on-site business sentiment of companies on a scale from 0 to 200. A value above 100 means more companies expect the business conditions this quarter to improve compared to the previous quarter, while a value below 100 indicates expectations of deterioration.

According to the survey results, the first half performance (operating profit) was relatively strong, with 7.7% exceeding, 40.4% achieving or nearing, and 51.9% falling short of the targets set at the beginning of the year. Sales and operating profit are expected to maintain similar levels in the third quarter following the second quarter.

The primary reasons cited were 'recovery of the domestic market (46.4%)', followed by 'improvement in external conditions such as increased global demand (42.9%)', 'improvement in profitability factors such as exchange rates and raw material supply (7.1%)', and 'improvement in financing conditions (3.6%)'.

Domestic and external risks expected to affect second-half performance (operating profit) include 'exchange rate and raw material price volatility (30.7%)', 'policy risks such as minimum wage and corporate burden bills (22.8%)', 'domestic market recession (21.8%)', followed by 'intensification of protectionism due to US-China conflicts (7.9%)', 'deterioration of financing conditions (7.9%)', 'emerging market instability due to US interest rate hikes (5.9%)', 'others (2.0%)', and 'reduction or suspension of government corporate support policies (1.0%)'.

With hopes for the end of COVID-19 growing due to vaccine distribution, most companies responded regarding market and technological changes in the post-COVID-19 era as follows: '① Gradual return to pre-COVID-19 conditions with some time lag (69.2%)', '② Significant and rapid changes in market and technology landscapes different from pre-COVID-19 (15.4%)', '③ No return to pre-COVID-19 conditions with gradual changes in market and technology (11.5%)', and '④ Rapid return to pre-COVID-19 conditions (3.8%)'.

Regarding the role of companies in solving social and economic issues in the post-COVID-19 era, ① 'Prioritize economic value creation but also pay more attention to solving social problems' was chosen by 80.8%, while ② 'Focus more on economic value creation' and 'Actively participate as direct agents of social issues' each accounted for 9.6%.

A representative of the Gwangyang Chamber of Commerce and Industry stated, “Although efforts are being made to return to normal life with the distribution of COVID-19 vaccines, there are concerns that the recovery momentum may be shaken due to the spread of variant viruses,” adding, “The base interest rate hike and ESG management will have considerable impacts, and active responses from companies are needed at this time.”

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