BSI Outlook for Top 600 Companies
Falls Back to 80s After March's 90s
Longest Continuous Slump on Record
Both Manufacturing and Non-Manufacturing Sectors Expected to Remain Sluggish
As the global economic slowdown continues, the prolonged deterioration of our companies' performance is ongoing. The Business Survey Index (BSI) outlook for April fell back into the 80s within a month. Both manufacturing and non-manufacturing sectors showed four consecutive months of simultaneous sluggishness, with domestic demand, exports, and investment all remaining below the baseline for ten consecutive months.
On the 26th, the Korea Economic Organization Association (KEOA) announced that the April BSI outlook, surveyed from April 7 to 14 targeting the top 600 companies by sales, was recorded at 88.0. This level is below the baseline (100), dropping back into the 80s within a month from March's 90.8. After a sharp decline in January this year (84.6), there was a rebound for two consecutive months, but the economic recovery trend did not sustain.
The March BSI actual performance was 91.9, remaining below the baseline for 3 years and 2 months straight since February 2022 (91.5). This marks the longest continuous period of underperformance in history.
By industry, both manufacturing (92.0) and non-manufacturing (84.2) sectors are expected to remain sluggish. The manufacturing BSI has been below 100 for 1 year and 1 month since April 2024 (98.4), and the non-manufacturing BSI has failed to surpass the 90 mark for four consecutive months. Notably, the non-manufacturing outlook falling below 90 is the first occurrence since July 2020, when domestic demand was severely contracted due to COVID-19.
Within manufacturing sub-sectors, most showed weakness except for general and precision machinery and equipment (111.1). Except for three sectors including pharmaceuticals that hovered around the baseline 100, six sectors are expected to face worsening business conditions.
KEOA analyzed, "Recently, rising trade barriers worldwide have negatively impacted corporate sentiment due to concerns over the slowdown in global demand."
In the non-manufacturing sector, all industries except leisure, accommodation, and dining (100.0) were below the baseline. Particularly, the construction industry BSI was 76.2, indicating a prolonged economic recession.
In the April survey, domestic demand (91.4), exports (93.9), and investment (93.3) all remained below the baseline, showing ten consecutive months of sluggishness.
Lee Sang-ho, head of KEOA's Economic and Industrial Division, emphasized, "Global trade uncertainties are increasing due to recent tariff barrier enhancements and the expansion of protectionism," adding, "It is necessary to support companies' proactive restructuring and minimize regulatory discussions that delay investment and business reorganization decisions." KEOA also added that policy support is needed to enable companies to respond flexibly through easing corporate merger regulations and halting discussions on amendments to the Commercial Act.
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