Yeosu, Q3 Corporate Business Outlook 'Cloudy'

Yeosu Chamber of Commerce Reports 7.7 Decline in Business Sentiment Index Compared to Last Quarter

[Yeosu=Asia Economy Honam Reporting Headquarters, Reporter Sim Kyung-taek] Amid growing concerns over the resurgence of COVID-19 community infections in the Yeosu area of Jeollanam-do, the business outlook for the third quarter showed a ‘negative’ trend.

According to the 2021 3rd/4th quarter business outlook survey conducted by the Yeosu Chamber of Commerce and Industry targeting 186 manufacturing companies in the region, the Business Sentiment Index (BSI) for the 3rd/4th quarter of 2021 was recorded at ‘83.8’.

This value is below the baseline of 100 for the business sentiment index (which indicates no change in business sentiment compared to the previous quarter), reflecting a negative result. Attention is drawn to the fact that the sentiment index, which had been recovering since the 4th quarter of last year, has shifted back to a downward trend.

The survey showed some differences in outlook by industry: while the petrochemical-related sectors showed a slight increase in their outlook, the general manufacturing sector showed a decline compared to the previous quarter.

The Yeosu Chamber of Commerce and Industry analyzed that in the case of oil refining companies, rising crude oil prices and the accompanying shortage of crude oil supply have led to large-scale inventory revaluation gains since the first half of this year. With rapid global vaccine distribution, there is an expectation that demand will surge in the second half of the year alongside economic recovery, a sentiment that has emerged despite concerns over the fourth wave of COVID-19.

For petrochemical companies, although the rise in international crude oil prices has negatively impacted product spreads, domestic and international demand is normalizing, and petrochemical product margins are strongly recovering. Reflecting these trends, despite concerns about COVID-19 resurgence and oversupply due to large-scale expansions in Asia including China, the petrochemical market continues to revive, resulting in a slight increase in the business outlook index compared to the previous quarter.

On the other hand, the business outlook index for general industries declined by about 20% compared to the previous quarter due to the impact of local cluster infections. Approximately half of the COVID-19 confirmed cases in Jeollanam-do occurred in Yeosu, Suncheon, and Gwangyang, with multiple local cases reported. Additionally, concerns over the resurgence of the virus centered in the metropolitan area have heightened community anxiety, contributing to the decline in the business outlook index.

A representative from the Yeosu Chamber of Commerce and Industry stated, “The business outlook index, which had been recovering since the 4th quarter of 2020 during the COVID-19 containment phase, sharply declined mainly in the domestic demand-based general manufacturing sector due to the spread of local infections and concerns over the fourth wave of COVID-19.”

However, they analyzed, “In the case of petrochemical-related industries, as the global economy begins to recover from the bottom and demand normalizes, there is an expectation that margins will recover, showing a difference between the petrochemical sector and the general manufacturing sector.”

Yeosu=Asia Economy Honam Reporting Headquarters, Reporter Sim Kyung-taek simkt7@asiae.co.kr

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