Manufacturing Business Outlook Surpasses 100 for the First Time in 24 Months

Korean Economic Association March BSI Outlook Announcement
March BSI Outlook at 97.0, Up from Previous Month
Manufacturing Outlook Clear, Non-Manufacturing Outlook Cloudy

Manufacturing sector companies have had a positive outlook on the economy for the first time in 24 months. In particular, the general and precision machinery and equipment industries showed a positive economic outlook. However, in the non-manufacturing sector, companies still evaluated the perceived economy negatively, causing the overall corporate economic outlook to fall below the baseline.

The Korea Economic Association announced on the 27th that, based on a survey of the Business Survey Index (BSI) targeting the top 600 companies by sales, the March BSI outlook rose 4.7 points from the previous month to 97.0.

The BSI is an index quantifying the perceived economy felt by companies; a value above the baseline of 100 indicates a positive economic outlook compared to the previous month, while a value below 100 indicates a negative outlook.

The BSI outlook has remained below 100 for 24 consecutive months since April 2022 (99.1), showing a prolonged downturn, but this year the figure has been rising for three consecutive months. The numbers have continued to increase through January (91.1) and February (92.3), with the rate of increase also growing.

However, the current performance situation is not favorable. The February BSI performance figure was 90.2, remaining below 100 for 25 consecutive months since February 2022 (91.5). It has fluctuated monthly but stayed below 100, and since December last year (94.9), the figure has declined for three consecutive months. This indicates a prolonged deterioration in corporate performance.

Looking at the March BSI by industry, manufacturing (100.5) and non-manufacturing (93.5) outlooks diverged. The manufacturing BSI surpassed the baseline for the first time in 24 months since April 2022 (94.8). The non-manufacturing BSI has continued a sluggish trend for three consecutive months after recording 100.5 in December last year.

Within manufacturing, positive outlooks were seen in general and precision machinery and equipment (119.0), automobiles and other transportation equipment (110.0), and petroleum refining and chemicals (106.3), while food and beverages and tobacco (100.0), and pharmaceuticals (100.0) hovered around the baseline. Notably, the increase in the outlook BSI for the general and precision machinery and equipment sector reached 24.3 points.

Among the seven non-manufacturing sectors, only wholesale and retail trade (101.9) showed a positive outlook. Except for leisure, accommodation, and dining (100.0), sectors such as construction (97.8), professional, scientific, technical, and business support services (92.9), transportation and warehousing (88.0), electricity, gas, and water supply (76.5), and information and communication (76.5) are expected to experience sluggish business conditions.

Lee Sang-ho, head of the Economic and Industrial Division at the Korea Economic Association, said, "It is encouraging that expectations for improvement in the manufacturing sector have emerged in March, but overall corporate sentiment remains weak," adding, "To ensure a definite rebound in corporate sentiment, populism should be avoided in the upcoming election period."

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