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Corporate business outlook has shown negative figures for 33 consecutive months (2 years and 9 months), marking the longest record in 49 years since statistics began. Analysis suggests that the negative manufacturing business outlook index, which includes the semiconductor sector, had a significant impact. The business community emphasized that it is time to strengthen economic support policies rather than focus on the legislative revision of the Commercial Act led by the opposition parties.

The Korea Economic Association (HanKyungHyup) announced on the 26th that the Business Survey Index (BSI) for December recorded a forecast value of 97.3 based on a survey of the top 600 companies by sales. A BSI below the baseline of 100 indicates a negative outlook compared to the previous month.

The BSI forecast has remained below the baseline for 33 consecutive months since April 2022. This 33-month continuous slump is the second longest since the survey began in 1975, following the previous record of 33 months from June 2018 to February 2021. If the outlook remains negative in the first month of the new year, next month, it will set a new all-time record.

The outlook varied by industry. Manufacturing recorded 89.9, while non-manufacturing recorded 105.1. Manufacturing fell below 90 for the first time in five months since July (88.5%). HanKyungHyup explained, "Due to the prolonged domestic demand slump, domestic supply of manufactured products has decreased for five consecutive quarters, worsening manufacturing business sentiment."

Among the 10 detailed manufacturing sectors, only automobiles and other transportation equipment (105.7) showed a positive outlook. Food and beverages, tobacco, and pharmaceuticals hovered around the baseline (100). The remaining seven sectors, including electronics and communication equipment (94.1), which includes the semiconductor sector, fell below the baseline.

Regarding the sluggish electronics and communication equipment sector, HanKyungHyup stated, "Business sentiment has weakened due to overlapping factors such as weak demand for consumer goods like home appliances and expectations of falling semiconductor prices caused by increased DRAM production capacity in China." According to last month's announcement by market research firm TrendForce, DRAM prices are expected to fall by 5-10% next year compared to last month.

In the non-manufacturing sector, two industries?information and communication (94.1) and construction (95.5)?are expected to deteriorate. Wholesale and retail trade hovered around the baseline. Four sectors, including electricity, gas, and water supply (126.3), exceeded the baseline.

The BSI by survey category showed negative outlooks across all sectors: domestic demand 98.4, financial conditions 97.5, exports 97.3, profitability 95.9, employment 94.3, investment 89.9, and inventory 104.6. An inventory index above the baseline of 100 indicates a negative outlook (excess inventory). For other sectors, a value below the baseline means a predominantly negative outlook.

Notably, investment (89.9) recorded its lowest level in 20 months since April last year (88.6), indicating that corporate investment sentiment is struggling to recover.

Lee Sang-ho, head of the Economic and Industrial Division at HanKyungHyup, said, "With the expansion of external risks and domestic demand slump overlapping, operating profits decreased in 12 out of 17 domestic industries in the third quarter," adding, "It appears that companies are reaching their limits due to deteriorating business performance."

He continued, "Now is the time to focus on alternatives to revive the economy rather than legislative regulations that significantly increase uncertainty in corporate management, such as revisions to the Commercial Act."