[Asia Economy Reporter Moon Chaeseok] The manufacturing industry outlook for the third quarter is expected to be similar to that of the second quarter. Although the government has introduced the 'Materials, Parts, and Equipment 2.0 Strategy,' which includes measures to reorganize the Global Value Chain (GVC), it is anticipated that South Korea's manufacturing sector will not recover from the impact of the COVID-19 pandemic anytime soon.
On the 12th, the Korea Institute for Industrial Economics and Trade announced the results of a Business Survey Index (BSI) conducted on 1,007 domestic manufacturers, showing a third-quarter business condition outlook of 84 and sales outlook of 85. Compared to the second quarter, the business condition remained the same, while sales dropped by 3 points.
The business condition index was steady at 86 in the first quarter, 84 in the second quarter, and 84 in the third quarter, but sales declined from 88 in the second quarter to 85 in the third quarter. A BSI above 100 indicates improvement from the previous quarter, while below 100 indicates deterioration.
Outlooks for domestic demand, exports, and investment were all negative. Domestic demand (domestic market shipments) fell 4 points from the second quarter to 84, exports dropped 3 points to 84, facility investment decreased by 1 point to 96, and employment declined by 1 point to 96.
Looking at sales outlook by industry, no sector exceeded 100. Machinery fell 6 points from the second quarter to 76, manufacturing dropped 3 points to 85, and materials decreased by 3 points to just 78. Meanwhile, new industries rose 11 points to 95, and Information and Communication Technology (ICT) increased by 5 points to 97.
By detailed sector, steel plummeted 28 points to 57, chemicals fell 21 points to 75, and shipbuilding remained at 75 after a 6-point decline. Refining and secondary batteries barely reached 100, rising 14 points and 11 points respectively, while wireless communication devices increased 18 points to 111.
Meanwhile, the business condition and sales in the second quarter recorded 69 and 68 respectively, each down 2 points from the first quarter. Domestic demand dropped 2 points from 71 to 69, and exports fell 6 points from 75 to 69.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
