Corporate Business Outlook Remains "Negative" in September... 18 Months of Sluggishness

"Manufacturing Industry Business Sentiment Slightly Improved"

It has been revealed that companies view the economic outlook for next month negatively. Companies have issued negative outlooks for 18 consecutive months (1 year and 6 months). This indicates that they consider the business environment to be difficult.

On the 21st, the Federation of Korean Industries (FKI) announced the results of the Business Survey Index (BSI) targeting the top 600 companies by sales, excluding the financial sector.

The outlook for next month was 96.9. It was recorded as 98.9 for manufacturing and 95.1 for non-manufacturing. An outlook below 100 means that the economy is viewed negatively compared to the previous month. The FKI reported that this figure has remained below 100 for 18 consecutive months. This means that companies have responded that they expect the economy to worsen for the next month for 18 consecutive months.

Manufacturing has been below the baseline for 18 consecutive months since April last year, and non-manufacturing has been below the baseline for 2 consecutive months since August.

The manufacturing BSI outlook index for September rose by 7.1 points from August (91.8). It recorded the highest value in 18 months since March last year (104.5). The FKI stated, "Recently, due to improvements in real indicators such as a decline in inventory rates, the sentiment among manufacturing companies is somewhat improving." According to Statistics Korea, the manufacturing inventory rate in June was 111.4%, the lowest level since October last year (111.2%).

On the afternoon of May 1st, shadows were cast over the Busan Port area. [Photo by Yonhap News]

Among detailed industries, the food and beverage and tobacco sector (121.1), general and precision machinery and equipment (113.3), wood, furniture, and paper (112.5), and automobiles and other transportation equipment (106.7) exceeded 100. The electronics and telecommunications equipment sector, which includes semiconductors, recorded the baseline of 100.0 for two consecutive months following the previous month. Petroleum refining and chemicals (92.9), non-metallic materials and products (92.3), metals and metal products (87.0), pharmaceuticals (80.0), and textiles and clothing (71.4) were below 100.

In the non-manufacturing sector, science, technology, and business support services (107.7) and transportation and warehousing (103.8) exceeded 100. Leisure, accommodation, and dining (100.0) dropped by 23.1 points from the previous month due to the end of the holiday season and decreased restaurant consumption. Construction (87.2), electricity, gas, and water supply (94.1), wholesale and retail trade (94.1), and information and communications (94.1) were below 100.

By survey category, financial conditions were 91.1, profitability 91.1, investment 93.3, employment 95.8, exports 96.7, domestic demand 99.2, and inventory 106.1. All categories have shown poor outlooks for 12 consecutive months since October last year. Inventory exceeding 100 indicates excess inventory and a negative outlook. The outlooks for domestic demand, exports, and investment have also shown simultaneous weakness for 15 consecutive months since July last year.

Choo Kwang-ho, head of the Economic and Industrial Headquarters at the FKI, said, "Recently, our economy is facing high external uncertainties such as the deepening economic instability of China, our largest trading partner, as well as high exchange rates and high oil prices." He added, "To stabilize corporate sentiment, the government must continue regulatory innovation and labor reform and strengthen institutional support to revitalize exports."

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