Improvement in Business Sentiment in May Due to Semiconductor Recovery Expectations and Increased Consumption

Manufacturing Business Sentiment Index Rises 3p... Non-Manufacturing Also Up 4p

Although economic uncertainty in Gyeonggi continues, expectations for a recovery in the performance of key industries such as semiconductors have revived, and with the resumption of face-to-face activities increasing consumption, the corporate sentiment index rose this month compared to the previous month.

According to the May Business Survey Index (BSI) released by the Bank of Korea on the 24th, the BSI for business conditions across all industries this month recorded 76, up 4 points from the previous month. This is the highest level since October last year (76). This index reflects business owners' judgments and outlooks on current business conditions, and a value below 100 indicates poor business conditions.

By industry, the manufacturing sector's BSI rose 3 points from the previous month to 73.

By detailed industry, increases were centered on electronic, video, and communication equipment (+12 points), other machinery and equipment (+9 points), and primary metals (+7 points). Semiconductor manufacturing equipment companies saw strong delivery performance, and in the case of primary metals, factory operations proceeded smoothly due to increased demand from upstream industries.

By company size, large enterprises (+3 points), small and medium enterprises (+2 points), and export companies (+6 points) showed increases, while domestic companies remained unchanged from the previous month.

The non-manufacturing sector's BSI also rose 4 points from the previous month to 78, the highest since October last year (79). Business facility management, business support, and rental services (+8 points), information and communication (+6 points), and wholesale and retail trade (+5 points) all increased.

In the wholesale and retail trade sector, demand for consumer goods increased in celebration of Family Month, and face-to-face activities rose. The information and communication sector also saw increased consumption of movie theaters and broadcast content due to the peak season effect. With continued mild weather, face-to-face activities increased, boosting demand for facility management, travel packages, and events.

The BSI outlook for June was surveyed at 76, up 2 points from this month (74). Manufacturing rose 1 point to 73, and non-manufacturing rose 2 points to 78.

The Economic Sentiment Index (ESI) for May, which reflects both the BSI and the Consumer Sentiment Index (CSI), recorded 94.2, up 0.4 points from the previous month. The ESI is an index that shows the economic sentiment of all private economic agents.

Hwang Hee-jin, head of the Statistical Survey Team at the Bank of Korea's Economic Statistics Bureau, explained, "Despite ongoing economic uncertainty, the expectation of a recovery in key industry performance was reflected, leading to a slight improvement in this month's BSI. Although the semiconductor business conditions are still not good, the delivery performance of semiconductor manufacturing equipment continues."