Bank of Korea, April Business Survey Index (BSI) and Economic Sentiment Index (ESI)
All-industry Business Condition BSI rises 2 points from previous month to 71
May Business Outlook BSI improves in both Manufacturing and Non-Manufacturing sectors
As prices of raw materials such as oil and copper rose, business conditions improved mainly for large corporations and export companies, leading to a slight improvement in corporate sentiment. However, sentiment among small and medium-sized enterprises (SMEs) and domestic market companies slightly deteriorated.
According to the results of the "April Business Survey Index (BSI) and Economic Sentiment Index (ESI)" released by the Bank of Korea on the 25th, the overall industry business performance BSI this month recorded 71, up 2 points from the previous month. This was due to improvements in manufacturing business conditions centered on export companies and large corporations, as well as a slight improvement in non-manufacturing sectors.
The BSI is an index that quantifies business owners' judgments and outlooks on their current business conditions. If negative responses outnumber positive ones, the index falls below 100.
The overall industry business performance BSI for April was 71, up 2 points from the previous month, showing a slight improvement. The manufacturing business BSI rose 2 points to 73, and the non-manufacturing BSI increased by 1 point to 69.
The manufacturing business performance BSI rose due to increases in petroleum refining and coke (11 points), electrical equipment (5 points), and primary metals (4 points). Petroleum refining and coke improved profitability due to rising international oil prices, electrical equipment improved mainly among cable manufacturers thanks to expanded demand for artificial intelligence (AI) and eco-friendly investments as well as increased product selling prices, and primary metals rose as product selling prices increased following the rise in non-ferrous metal raw material prices.
By company size and type, large corporations recorded 80, up 3 points from the previous month, and export companies rose 5 points to 80. However, SMEs fell 1 point to 64, and domestic market companies dropped 1 point to 69.
Hwang Hee-jin, head of the Statistical Survey Team at the Bank of Korea’s Economic Statistics Department, explained, "While it is true that corporate sentiment has slightly improved, it still remains below the long-term average, so the outlook has not significantly improved."
The non-manufacturing business performance BSI rose due to increases in business facility management, business support, and rental services (6 points), professional, scientific, and technical services (4 points), and electricity, gas, and steam supply (7 points). Business facility management, business support, and rental services improved as face-to-face activities and event demand increased in spring, along with a rise in new facility management contracts. Professional, scientific, and technical services rose due to increased sales in semiconductor-related services and advertising. Electricity, gas, and steam supply increased as demand for city gas rose due to lower-than-average temperatures.
The May business outlook BSI improved in both manufacturing and non-manufacturing sectors. Manufacturing rose 1 point from the previous month to 74, led by increases in electrical equipment (10 points) and primary metals (5 points). Non-manufacturing rose 2 points to 71, with construction (4 points) and information and communication (4 points) sectors improving.
By company size and type, the May manufacturing business outlook BSI rose for large corporations (3 points) and export companies (5 points), but fell for SMEs (-1 point), while domestic market companies remained unchanged from the previous month.
The April Economic Sentiment Index (ESI), which incorporates the Consumer Sentiment Index (CSI) into the BSI, recorded 94.5, up 2.3 points from the previous month. The seasonally adjusted ESI cyclical component was 92.3, down 0.2 points from the previous month.
This survey was conducted from the 9th to the 17th of this month targeting 3,524 corporate entities nationwide. A total of 3,295 companies responded, including 1,847 manufacturing firms and 1,448 non-manufacturing firms.
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