September Corporate Sentiment Slightly Improves... Rebounds After Three Months

Manufacturing Business Sentiment Index (BSI) Rises 1p... Non-Manufacturing Also Up 2p
Semiconductor Slump Persists, Auto Demand Declines

The business sentiment in September slightly improved, supported by a partial recovery in some manufacturing sectors and an increase in seasonal demand.

According to the 'September Business Survey Index (BSI)' released by the Bank of Korea on the 27th, the BSI for all industries in September rose by 2 points from the previous month to 73. The overall industry BSI, combining manufacturing and non-manufacturing sectors, rebounded for the first time in three months. The BSI is an indicator reflecting companies' perception of the economic situation; a value below the baseline of 100 means that more companies view the economy negatively than positively.

By sector, the manufacturing BSI for September was 68, up 1 point from 67, which was the lowest level in six months recorded last month. Specifically, sectors such as electronic, video, and communication equipment declined by 2 points due to delayed recovery in semiconductor prices and decreased demand. However, other machinery and equipment rose by 6 points as export performance improved for automated equipment manufacturers due to the rise in exchange rates. Reflecting the possibility of product price increases caused by reduced steel production in China and real estate stimulus measures, primary metals increased by 5 points. Petroleum refining and coke jumped 13 points due to the expansion of the Singapore refining margin spread and increased sales in the lubricants sector.

By company size and type, large enterprises rose by 1 point, and domestic companies increased by 2 points, while small and medium-sized enterprises and export companies each fell by 1 point.

The non-manufacturing BSI also rose by 2 points from the previous month to 77, rebounding for the first time in four months. In particular, arts, sports, and leisure-related services increased by 18 points due to the peak golf season in autumn and the resumption of group tours to China. Demand for civil engineering design in the public sector increased, raising the professional, scientific, and technical services sector by 11 points. Business facility management, business support, and rental services rose by 5 points due to increased demand for staffing and event agency services amid more outdoor events in autumn. Construction rose by 3 points due to increased sales from the commencement of ordered civil engineering projects.

The BSI for business outlook in October was surveyed at 73, the same as this month. The manufacturing outlook BSI fell by 2 points from the previous month to 67, while the non-manufacturing outlook BSI rose by 1 point to 77.

For the manufacturing outlook BSI, large enterprises, small and medium enterprises, export companies, and domestic companies all declined. Electronic, video, and communication equipment dropped by 7 points, and automobiles fell by 10 points. Hwang Hee-jin, head of the Economic Statistics Bureau's Statistical Survey Team, explained the decline, saying, "The outlook for electronic, video, and communication equipment is not bright overall due to delayed recovery in semiconductor and IT industries, and the automobile sector is affected by decreased new car demand and reduced finished product production caused by high interest rates."

The Economic Sentiment Index (ESI), which reflects the economic sentiment of all private economic agents, recorded 92.7, down 1.3 points from the previous month.