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South Korean manufacturing sentiment hits 7-month low

Staff writer ▼ | January 30, 2016
South Korean manufacturing companies' business sentiments sank to the lowest level in seven months amid still sluggish consumer spending, a poll showed Friday.
South Korea factory
Asia   The BSI of non-manufacturing companies lost 1 point
The business survey index (BSI) for manufacturing companies came to 66 for February, down from 68 for January and the lowest mark since 66 posted in June 2015, according to a survey by the Bank of Korea (BOK).

A reading below 100 means pessimists outnumber optimists. The monthly survey covers about 2,800 firms, including some 1,700 manufacturing companies.

The BSI of non-manufacturing companies lost 1 point from the previous month to 68 for February, also slipping to the lowest level since June 2015.

The fall in manufacturing sentiment came as more companies expect their domestic sales to shrink.

A BSI on domestic sales of manufacturers came to 76 for February, down 2 points from 78 in January, according to the BOK.

Despite a slight improvement in recent months, private consumption is widely expected to remain in the doldrums down the road. In the October-December period, consumer spending grew 1.5 percent on-quarter, quickening from a 1.2 percent gain in the previous quarter.

The index on exports, on the other hand, gained 3 points on-month to 82 for February.

South Korea's exports dropped every single month last year. In December, outbound shipments plunged 13.8 percent on-year earlier to US$42.64 billion. The tally on January exports is due on Feb. 1.

Of respondents, 25 percent said the slump in the domestic market was the most serious problem facing them, while 23.4 percent of non-manufacturing firms also cited slowing domestic consumption as a major problem, according to the survey.

Meanwhile, the BOK said the BSI on actual business performance of manufacturers came to 65 in January, the lowest level since March 2009.