Global Economic Slowdown Worsens Corporate Sentiment... August Outlook Also 'Gloomy'

July BSI Down 2 Points from Previous Month
Both Manufacturing and Non-Manufacturing Deteriorate
Economic Sentiment Index Falls 1.6 Points to 94.1

Amid ongoing economic uncertainty, the perceived business conditions of companies worsened this month due to the global economic slowdown. Both manufacturing and non-manufacturing sectors are expected to experience sluggish conditions next month due to poor export performance.

According to the July Business Survey Index (BSI) results released by the Bank of Korea on the 27th, the BSI for business performance across all industries this month recorded 74, down 2 points from the previous month. This index reflects business owners' assessments and outlooks on current business conditions, with values below 100 indicating poor conditions.

By sector, the manufacturing BSI fell by 1 point from the previous month to 72.

By detailed industry, the electronics, video, and telecommunications equipment sector rose (+5 points) reflecting expectations of recovery in mobile and display sectors due to new smartphone product launches. However, primary metals (-14 points), electrical equipment (-10 points), and other machinery and equipment (-6 points) declined due to weak steel demand in China, increased supply leading to weakened price competitiveness, decreased new orders for electrical equipment suppliers, and reduced upstream demand in construction.

By company size, small and medium-sized enterprises (+1 point) and export companies (+1 point) saw increases, while large companies (-3 points) and domestic market companies (-4 points) declined.

The non-manufacturing BSI also fell by 1 point from the previous month to 76. Business facility management, business support, and rental services (-7 points), information and communications (-5 points), and transportation and warehousing (-5 points) sectors declined.

In the information and communications sector, decreases in moviegoers and demand for broadcast content led to reduced advertising orders. The transportation and warehousing sector was affected by seasonal factors such as the rainy season, which reduced freight transport demand. Demand for dispatched labor also decreased due to sluggish upstream industries.

The outlook BSI for August business conditions was surveyed at 73, down 2 points from this month’s 75. Manufacturing fell by 3 points to 69, and non-manufacturing declined by 2 points to 76.

The July Economic Sentiment Index (ESI), which combines the BSI with the Consumer Sentiment Index (CSI), recorded 94.1, down 1.6 points from the previous month. The ESI reflects the economic sentiment of all private economic agents.

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