"Semiconductors Lead, Consumer Coupons Boost: Business Sentiment Improves for Second Month"

Bank of Korea Releases "September Business Survey Results and Economic Sentiment Index (ESI)"
CBSI at 91.6, Up 0.6 Points from Previous Month... Manufacturing Improves Led by Semiconductors
"Consumer Coupons and Holiday Effect" Drive Recovery in Non

The Business Sentiment Index (BSI) for all industries in September showed improvement for the second consecutive month. Although trade uncertainty increased due to delays in follow-up negotiations on tariffs with the United States, the manufacturing sector improved, led by semiconductors. The non-manufacturing sector also showed signs of recovery, particularly in wholesale and retail trade, thanks to the impact of consumer coupons aimed at revitalizing the livelihood economy.

According to the "September Business Survey Results and Economic Sentiment Index (ESI)" released by the Bank of Korea on September 26, the Composite Business Sentiment Index (CBSI) for all industries this month stood at 91.6, up 0.6 points from the previous month. The CBSI is an indicator of business sentiment calculated using key indices from the Business Survey Index (BSI). A reading above 100 indicates that companies' expectations for the economic situation are more optimistic than in the past, while a reading below 100 means they are more pessimistic.

Lee Hyeyoung, head of the Economic Sentiment Survey Team at the Economic Statistics Department 1 of the Bank of Korea, stated, "Semiconductors performed exceptionally well last month, and this month, manufacturing continued to improve, led by semiconductors. This covered a significant portion of the index," adding, "The non-manufacturing sector also showed improvement, mainly in wholesale and retail trade, due to the impact of consumer coupons aimed at revitalizing the livelihood economy."

This month, the CBSI for manufacturing rose by 0.1 points from the previous month to 93.4. The main factors driving the increase in manufacturing were production (up 0.4 points) and new orders (up 0.2 points), while product inventory (down 0.6 points) acted as a limiting factor, restricting the overall increase.

This month, the performance of the manufacturing sector saw significant improvement in electronics, video, and telecommunications equipment. However, the increase was limited as several industries, including chemicals and chemical products, as well as rubber and plastics, deteriorated. The improvement in electronics, video, and telecommunications equipment was driven by continued strong semiconductor exports and the launch of new wireless communication devices. On the other hand, the weakness in chemicals and chemical products was influenced by weakened competitiveness due to oversupply from China. Rubber and plastics were also affected by worsening business conditions and financial situations, especially among auto parts and tire companies.

The CBSI for the non-manufacturing sector also rose by 1.1 points to 90.5. The main factor contributing to the increase in the non-manufacturing sector was profitability (up 1.4 points). Performance in the non-manufacturing sector improved mainly in wholesale and retail trade, as well as in professional, scientific, and technical services. Wholesale and retail trade showed a recovery trend due to demand during the Chuseok holiday and the effect of consumer coupons aimed at revitalizing the livelihood economy. In professional, scientific, and technical services, an increase in public sector orders led to improved business conditions and profitability, particularly among civil engineering and plant design companies.

The outlook for next month's Business Sentiment Index was surveyed at 88.5, down 3.3 points from the previous month. The outlook for manufacturing was 89.4, down 2.7 points from the previous month, while the outlook for non-manufacturing was 87.9, down 3.6 points. The outlook for manufacturing in October is expected to worsen, particularly in primary metals, chemicals and chemical products, and rubber and plastics. The outlook for non-manufacturing next month is also expected to deteriorate, especially in transportation and warehousing, and construction.

Team leader Lee explained, "This is due to the impact of increased trade uncertainty related to delays in follow-up negotiations on tariffs with the United States, as well as concerns about a reduction in business days due to the long Chuseok holiday." She added, "However, as there can be discrepancies between outlooks and actual monthly performance, we need to keep an eye on the figures."

The Economic Sentiment Index (ESI), which combines the BSI and the Consumer Sentiment Index (CSI), fell by 3.3 points from the previous month to 91.3. The cyclical variation, which eliminates seasonal factors, stood at 92.3, up 0.6 points from the previous month.

Meanwhile, this survey was conducted from September 11 to 18, targeting 3,524 corporate entities nationwide. Of the respondents, 1,843 were manufacturing companies and 1,455 were non-manufacturing companies, totaling 3,298 companies (93.6%).

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