January Economic Outlook 'Negative'... 22 Consecutive Months of Sluggishness

Domestic companies also showed a negative outlook on the economy for next month.

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The Korea Economic Association (HanKyungHyup) announced on the 20th that, based on a survey of the Business Survey Index (BSI) targeting the top 600 companies by sales, the forecast for January next year recorded 91.1, down 2.9 points from the previous month.

Accordingly, the BSI forecast has remained below the baseline of 100 for 22 consecutive months since April last year (99.1). A BSI forecast above 100 indicates a positive economic outlook compared to the previous month, while below 100 indicates a negative outlook.

By industry, the BSI for manufacturing (87.0) and non-manufacturing (95.2) both showed sluggish performance. The non-manufacturing BSI was 100.5 this month, signaling a positive sign for the first time in five months, but it fell below the baseline again after just one month.

[Provided by Hankyung Association]

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All detailed manufacturing sectors have a pessimistic economic outlook for next month. Only the food and beverage & tobacco, non-metallic materials and products, and general & precision machinery and equipment sectors were at the baseline, while the other seven sectors fell below it.

Among the seven detailed non-manufacturing sectors, ▲Electricity, Gas & Water (110.5), ▲Leisure, Accommodation & Food Service (107.1), and ▲Transportation & Warehousing (104.2) showed favorable outlooks. Wholesale and retail trade was at the baseline (100.0), while ▲Professional, Scientific, Technical & Business Support Services (85.7), ▲Construction (82.6), and ▲Information & Communication (81.3) were expected to experience sluggish business conditions.

Indices by survey category such as investment, exports, and employment showed negative forecasts in all sectors for the 16th consecutive month. In particular, simultaneous sluggishness in domestic demand (93.8), exports (94.9), and investment (91.9) has continued for 19 consecutive months since July last year.

Choo Kwang-ho, head of the Economic and Industrial Division at HanKyungHyup, stated, "The business environment is difficult due to global economic downturn and consumption contraction caused by high interest rates and high inflation. It is necessary to expand the growth potential of our economy through labor reform, regulatory reform, and tax improvement, and to strengthen dynamism to boost corporate sentiment."

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