July Manufacturing Outlook Remains 'Weak'... Non-Manufacturing Sector Expects Holiday Boost

FKI Corporate Business Survey Index (BSI) Outlook Announcement

Corporate sentiment toward the market is struggling to recover. The outlook for July released by companies remains negative. This trend is particularly prominent in the manufacturing sector, while the non-manufacturing sector showed a positive outlook, coinciding with the vacation season.

The Federation of Korean Industries announced on the 28th that it conducted a Business Survey Index (BSI) targeting the top 600 companies by sales, resulting in these findings. The BSI is an indicator derived by asking companies about trends and outlooks in areas such as domestic demand, exports, and investment. A BSI below the baseline (100) indicates a negative assessment, while a BSI above 100 indicates a positive outlook.

[Image source=Federation of Korean Industries]

The BSI outlook for July was 95.5, failing to exceed 100 for 16 consecutive months since April last year. This marks the longest period of negative outlooks since February 2021. When distinguishing between manufacturing and non-manufacturing, negative outlooks were more pronounced in manufacturing. The manufacturing BSI outlook for July recorded 89.8, remaining below 100 for 16 months since April last year (94.8).

Among detailed manufacturing industries, negative outlooks were clear in ▲Metal and metal products (79.3) ▲Pharmaceuticals (83.3) ▲Non-metallic materials and products (84.6). In the case of Electronics and communication equipment (95.2), including semiconductors, negative outlooks continued for 10 consecutive months since October last year, but the figure showed a relatively increased value following the previous month (95.2).

[Image source=Federation of Korean Industries]

In the non-manufacturing sector, the BSI recorded 101.6, marking the first positive business outlook in 14 months since May last year. Among detailed industries, leisure, accommodation, and dining (128.6), which are expected to benefit from the vacation season, raised the figure. Information and communication (105.6) and transportation and warehousing (104.0) industries also showed favorable outlooks. Only construction (93.5) fell below the baseline.

The actual BSI for June was 94.2. Since February last year (91.5), negative outlooks have continued for 16 consecutive months. As the economic downturn reduced corporate performance, related indicators were affected. Choo Kwang-ho, head of the Economic and Industrial Headquarters at the Federation of Korean Industries, said, "Manufacturing sentiment remains sluggish," and added, "It is necessary to boost the weakened corporate sentiment by reasonably adjusting the minimum wage."

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