With Continued Export Boom... Manufacturing Business Sentiment Hits Highest in 22 Months

June Manufacturing Business Sentiment Index Hits Highest in 22 Months
Continued Export Strength in Semiconductors and More
Non-Manufacturing Sentiment Also Improves

As exports centered on semiconductors continue to perform well, the manufacturing business sentiment index recorded its highest level in 22 months.

According to the "June Business Survey Results and Economic Sentiment Index (ESI)" released by the Bank of Korea on the 27th, the manufacturing business sentiment index (CBSI) for this month rose by 3 points from the previous month to 97.4.

This is the highest level in 22 months since recording 102.1 in August 2022. The manufacturing CBSI has consistently remained below 100 since August 2022, fluctuating up and down, but has shown an upward trend for three consecutive months since March this year.

CBSI is a newly compiled indicator by the Bank of Korea starting this month, supplementing the existing Business Survey Index (BSI). It is calculated using the main indices of BSI (five for manufacturing and four for non-manufacturing).

BSI quantifies the judgment and outlook of business owners on their current business conditions. If negative responses outnumber positive ones, the index falls below 100.

The manufacturing performance in June was driven by exports such as semiconductors. Chemicals and products increased due to rising exports of cosmetics and growing upstream demand for industrial chemical products, while electronic, video, and communication equipment increased as semiconductor exports continued to perform well. Primary metals improved as exports increased mainly among small and medium-sized enterprises.

Looking at manufacturing by company size, sentiment improved across the board: large enterprises (+2 points), small and medium enterprises (+3.1 points), export companies (+3.9 points), and domestic market companies (+1.7 points).

Non-manufacturing sentiment also improved. The June non-manufacturing CBSI rose by 2.5 points from the previous month to 94.3.

June non-manufacturing performance improved mainly in wholesale and retail trade, real estate, and construction. Wholesale and retail trade saw increased sales centered on industrial product wholesalers, real estate experienced some improvement with new housing sales, and construction saw increased sales as public sector housing and civil engineering orders rose and progress on existing projects improved.

The overall industry CBSI also rose by 2.8 points from the previous month to 95.7. This is the highest level in 11 months since recording 95.7 in July last year. The overall industry CBSI has been rising for four consecutive months since March (89.4), after falling to 87.8 in February.

Business outlook for next month also generally improved. The July manufacturing outlook CBSI rose by 1.4 points from the previous month to 95.1. The July non-manufacturing outlook CBSI also increased by 1.3 points to 91.7. Manufacturing is expected to improve mainly in electronic, video, and communication equipment and chemicals and products, while non-manufacturing is expected to improve mainly in real estate and transportation and warehousing.

The June ESI, which reflects the Consumer Sentiment Index (CSI) in the BSI, rose by 0.9 points from the previous month to 94.7. The cyclical component remained unchanged at 92.7.

This survey was conducted from the 12th to the 19th of this month targeting 3,524 corporate entities nationwide. The number of respondents was 3,331, with 1,863 in manufacturing and 1,468 in non-manufacturing.