Gwangyang Chamber of Commerce, Business Sentiment Index Exceeds 100 for Two Consecutive Quarters

[Asia Economy Honam Reporting Headquarters, Reporter Heo Seon-sik] The Gwangyang Chamber of Commerce and Industry in Jeonnam (Chairman Lee Baek-gu) announced on the 29th that the '2021 4th Quarter Business Outlook Survey' conducted from August 30 to September 3 (excluding holidays) targeting about 100 local companies showed a business outlook index of 107.5.

This is a 2.2-point decrease from the previous quarter's 109.7, but it has exceeded 100 for two consecutive quarters, indicating expectations for economic recovery.

Looking at the distribution of responding companies, 24.5% of the total respondents expected improvement compared to the previous quarter, 58.5% responded that it would be similar to the previous quarter, and 17.0% expected a worsening business climate.

The Business Survey Index (BSI) quantifies the on-site business sentiment of companies and is displayed between 0 and 200. A value above 100 means more companies expect the business climate to improve compared to the previous quarter, while below 100 indicates expectations of deterioration.

By category, contrary to recent forecasts by the government and the Bank of Korea predicting '4% economic growth' this year, 75.5% of surveyed companies responded that "4% economic growth will be difficult."

Regarding whether this year's performance (operating profit) met the targets set at the beginning of the year, 37.7% reported underachievement, while 58.5% achieved or were close to the target, and 3.8% exceeded it, indicating relatively good performance.

Meanwhile, the top domestic and international risks expected to affect this year's performance were 'domestic market recession due to prolonged COVID-19 (39.6%)', followed by 'exchange rate and raw material price volatility (30.7%)', 'interest rate hike trend (11.9%)', 'intensification of protectionism such as US-China conflicts (7.9%)', 'economic issues fading due to the full-scale presidential election season (5.9%)', and 'deterioration of financing conditions such as loan maturity (4.0%)'.

Regarding changes in corporate activities and work environments since the outbreak of COVID-19 this year, nearly half of the companies cited 'changes in work environment such as telecommuting and non-face-to-face meetings (49.3%)', followed by 'increased interest not only in economic value creation but also in solving social issues such as ESG (15.9%)', and both 'introduction of digital innovation technologies in manufacturing processes such as smart factories, AI, and automation' and 'expansion of online transactions and non-face-to-face distribution channels' at 14.5% each.

A representative of the Gwangyang Chamber of Commerce and Industry said, "As the fourth wave of COVID-19 has continued for over three months, it is inevitable to revise the government's plan for 'gradual daily recovery (with COVID-19 coexistence)' scheduled for the end of October, and the possibility of additional interest rate hikes for monetary policy normalization is increasing," adding, "Monitoring of expected domestic and international situations is necessary as expectations for economic recovery may weaken."

Asia Economy Honam Reporting Headquarters, Reporter Heo Seon-sik hss79@asiae.co.kr