Rising Raw Material Prices and Supply Crisis... Corporate Sentiment Remains Stagnant (Comprehensive)

November BSI Maintains 86... Real Estate Buying Sentiment Weakens, Non-Manufacturing Declines

[Asia Economy Reporter Jang Sehee] Corporate sentiment remains stagnant due to rising raw material prices and ongoing global supply chain bottlenecks. In particular, despite the phased recovery policy (With Corona), the non-manufacturing sector's sentiment slightly declined due to weakened real estate buying sentiment.

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

By industry, manufacturing remained at the same level as the previous month. Electronics, video, and telecommunications equipment rose by 3 points, but primary metals and chemical substances/products fell by 5 points and 4 points respectively.

The service and other non-manufacturing sectors recorded 83, down 1 point from the previous month. While transportation and warehousing (+11 points) increased, sectors centered on real estate (-8 points) and wholesale and retail trade (-5 points) decreased.

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. The non-manufacturing sector worsened as real estate buying sentiment weakened."

By company size, large enterprises fell 2 points to 98, while small and medium-sized enterprises rose 3 points. Large companies were significantly affected by sluggish business conditions related to electronics, video, and telecommunications equipment due to adjustments in memory semiconductor prices. Small and medium-sized enterprises showed an upward trend due to increased demand for electronic products and normalization of overseas factory operations.

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. Manufacturing remained steady at 88, but non-manufacturing stayed at 83, down 2 points. Kim added, "Corporate sentiment is expected to be affected by instability in intermediate goods supply, logistics disruptions, and rising raw material prices. The development of the COVID-19 situation also needs to be closely monitored."

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

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