Corporate Sentiment 'Flat'... Real Estate Buying Sentiment Declines, Non-Manufacturing Down

Corporate Sentiment Index Hits 86 Again
Large Companies Struggle While SMEs Thrive
Uncertainty Persists in December

[Asia Economy Reporter Jang Sehee] Corporate sentiment remains stagnant due to rising raw material prices and ongoing global supply chain bottlenecks. In particular, the non-manufacturing sector was heavily impacted by the weakened real estate buying sentiment.

According to the 'November Business Survey Index (BSI)' released by the Bank of Korea on the 24th, the BSI for overall industry business performance this month was 86, the same as in October (86). The BSI is a statistic that surveys business owners' judgments and outlooks on current business conditions; if negative responses outnumber positive ones, the index falls below 100.

By sector, the manufacturing business performance BSI was 90, unchanged from the previous month. Electronics, video, and telecommunications equipment (+3 points) rose, but primary metals (-5 points) and chemical substances and products (-4 points) declined. The non-manufacturing business performance BSI was 83, down 1 point from the previous month (84).

Real estate buying sentiment drops, business conditions 'plummet'... Non-manufacturing sector expected to suffer

Kim Daejin, head of the Corporate Statistics Team at the Bank of Korea's Economic Statistics Bureau, explained, "Despite the easing of domestic quarantine measures, corporate sentiment was affected by rising raw material prices, logistics costs, and global bottlenecks," adding, "As real estate buying sentiment weakened, the non-manufacturing sector deteriorated." This reflects a negative outlook on non-manufacturing business conditions due to the slump in real estate buying sentiment.

The outlook varied by company size. The BSI for small and medium-sized enterprises (SMEs) rose 3 points to 81 from 78 the previous month, thanks to increased demand for electronic products and the normalization of overseas factory operations.

On the other hand, large enterprises saw a 2-point decline to 98. The sluggish BSI for large companies was due to adjustments in memory semiconductor prices, which negatively affected the electronics, video, and telecommunications equipment sector.

Companies say "December management will be tougher"... Dark clouds persist over non-manufacturing

Companies expect the business environment to worsen further in December. The overall industry business outlook BSI for December was 85, down 1 point from the previous month. The manufacturing business outlook BSI remained steady at 88. The non-manufacturing business outlook BSI fell 2 points to 83.

The Bank of Korea also views uncertainty as still high. Kim said, "Corporate sentiment is expected to be affected by instability in intermediate goods supply, logistics disruptions, and rising raw material prices," adding, "We also need to carefully monitor the development of the COVID-19 situation."

Meanwhile, the Economic Sentiment Index (ESI), which encompasses both consumers and businesses, rose 0.7 points from the previous month to 106.3.

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