Manufacturing Business Sentiment Remains Sluggish for Second Month... Only Exports Show Signs of Rebound

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The business sentiment in the domestic manufacturing sector remained sluggish for the second consecutive month, falling below the baseline. Both domestic demand and exports contracted simultaneously, resulting in overall weakness across production, investment, and profitability.

According to the 'April 2026 Industrial Business Survey' released by the Korea Institute for Industrial Economics & Trade (KIET) on April 26, the Professional Survey Index (PSI) for the manufacturing sector stood at 95 in April. This figure has remained below the baseline (100) for two consecutive months and marks a slight decline from the previous month’s figure of 97.

The main reason was identified as simultaneous weakness in both domestic demand and exports. The PSI for domestic demand fell back below the baseline to 94, while exports also dropped to 92, falling below the baseline for the first time in eight months. As a result, the production level (94) also dipped below the baseline for the first time in six months. Investment (93) and profitability (87) also continued to underperform, whereas product prices (126) reached their highest level since May 2021.

However, there are signs of a partial rebound in May. The business outlook PSI for May is projected at 95, still below the baseline, but up by 7 points from the previous month. Notably, exports are expected to slightly exceed the baseline at 102, while domestic demand (96) is still forecast to remain weak.

The business sentiment gap between sectors is becoming more pronounced. As of April, sectors such as semiconductors, mobile phones, shipbuilding, and steel exceeded the baseline, whereas automobiles, chemicals, textiles, and bio·health remained sluggish. In particular, automobiles and textiles saw a significant decline compared to the previous month.

For May, it is anticipated that only some industries-such as semiconductors, steel, and home appliances-will surpass the baseline, while many others, including mobile phones, automobiles, machinery, and textiles, are expected to continue their weak performance.

By category, only the ICT sector maintained relatively strong momentum. The ICT business PSI for April was 116, exceeding the baseline, whereas the machinery and materials sectors both fell below the baseline at 88. This trend is projected to continue in May, with ICT (109) maintaining its positive momentum, while machinery (88) and materials (90) are both forecast to remain sluggish.

KIET explained, "With both domestic demand and exports weakening simultaneously, the overall business sentiment in the manufacturing sector has contracted. However, some signs of recovery in exports are emerging, so it will be important to monitor future developments."

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