Growing Concerns Over Economic Slowdown... Corporate Sentiment Worsens for Two Consecutive Months

Overall Industry Business Survey Index BSI 76... Down 2 Points
Concerns Over Economic Slowdown Due to Interest Rate Hikes Spread
Next Month's Outlook Worsens for Both Large and Small-Medium Enterprises

As concerns over economic slowdown grow due to tightening policies in major countries including the United States, the business sentiment among domestic companies has worsened for two consecutive months.

According to the October Business Survey Index (BSI) released by the Bank of Korea on the 26th, the BSI for all industries this month stood at 76, down 2 points from 78 in September.

The BSI is a statistic that surveys companies' judgments and outlooks on the current business situation; if negative responses outnumber positive ones, the index falls below 100.

The overall industry BSI had declined for two consecutive months since May (86), then slightly rose in August, but fell again in September and worsened for two consecutive months.

The Bank of Korea explained, "Amid persistent high inflation and concerns over economic slowdown due to interest rate hikes in major countries, the BSI fell 2 points compared to the previous month, mainly in the manufacturing sector."

The manufacturing sector's October business BSI was 72, down 2 points from the previous month. The largest declines were seen in other manufacturing (-14 points), chemical substances and products (-9 points), rubber and plastics (-9 points), and electronic, video, and communication equipment (-5 points).

Both large enterprises (-3 points) and small and medium enterprises (-1 point) experienced worsened business sentiment. Export companies (-6 points) saw a decline in BSI, while domestic companies maintained the same level of 72 as the previous month.

The manufacturing business outlook BSI for next month recorded 73, down 2 points from the previous month, mainly due to declines in rubber and plastics (-13 points), other manufacturing (-12 points), and chemical substances and products (-10 points).

Next month, business conditions are expected to worsen for large enterprises (-3 points), small and medium enterprises (-3 points), export companies (-4 points), and domestic companies (-2 points).

Companies cited rising raw material prices as the biggest management difficulty, followed by uncertain economic conditions and exchange rates.

The non-manufacturing sector's October business BSI was 79, also down 2 points from the previous month.

The largest declines were in the information and communication industry (-10 points), which saw decreased sales due to intensified competition, and the real estate industry (-10 points), which was directly hit by the housing market slowdown.

The non-manufacturing business outlook BSI for next month recorded 78, down 3 points from the previous month, mainly due to declines in the real estate industry (-13 points) and accommodation industry (-11 points).

The Economic Sentiment Index (ESI) for October, which reflects both the BSI and the Consumer Sentiment Index (CSI), fell 2.5 points from the previous month to 95.5.

An ESI below 100 means that the economic sentiment of all private economic agents, including companies and households, has worsened compared to the past average.

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