FKI BSI Survey of Top 600 Companies
Manufacturing and Non-Manufacturing Sectors Weaken for Second Consecutive Month
Electronics and Communications Equipment, Including Semiconductors, Shaken by U.S. Tariffs
Domestic Demand, Exports, and Inv
The Business Survey Index (BSI), an indicator that shows how Korean companies expect the economy to perform in the coming months, has remained sluggish for 3 years and 6 months. Despite the launch of a new administration and changes in domestic and global economic conditions, companies still do not expect the economy to improve in the near future.
According to the results of a BSI survey conducted by the Federation of Korean Industries (FKI) on the top 600 companies by sales, released on August 29, 2025, the BSI outlook for September 2025 was 93.2, which is below the baseline of 100. A BSI above 100 indicates that companies have a positive outlook on the economy compared to the previous month, while a figure below 100 means they have a negative outlook.
As a result, the BSI has not exceeded the baseline of 100 for 3 years and 6 months since recording 99.1 in April 2022. The actual BSI for August was also recorded at 92.0, marking 3 years and 7 consecutive months of poor performance since 91.5 in February 2022, indicating a prolonged trend of deteriorating corporate performance.
By sector, both manufacturing (92.6) and non-manufacturing (93.8) indices remained weak for the second consecutive month. The manufacturing BSI has remained below the baseline for 1 year and 6 months since April 2024, and the non-manufacturing BSI has failed to rebound for two consecutive months. Among the 10 detailed manufacturing sectors, only pharmaceuticals (125.0), food, beverages and tobacco (106.3), and automobiles and other transportation equipment (103.0) exceeded the baseline of 100 and showed a positive outlook. The outlook for the remaining 7 sectors, including non-metallic materials and products (66.7), was negative. The FKI cited external trade risks and prolonged stagnation in the construction sector, leading to reduced demand for raw materials such as cement, as the causes.
In particular, the electronics and telecommunications equipment sector, which includes semiconductors, plunged by 16.4 points from the previous month due to concerns over tariff uncertainties, falling below the baseline (from 111.1 to 94.7). Metal and fabricated metal products, which are subject to itemized tariffs by the United States, also continued to show a negative outlook in the 80-point range for three consecutive months. In relation to the manufacturing of construction raw materials, non-metallic materials and products (66.7), which includes cement manufacturing, have remained below 80 for five consecutive months.
Among the 7 detailed non-manufacturing sectors, leisure, accommodation and food services (107.7), and professional, scientific, technical and business support services (106.7) showed a positive outlook. Apart from wholesale and retail (100.0) and information and communications (100.0), which were right at the baseline, the remaining 3 sectors were expected to remain sluggish. The FKI also explained that business sentiment has worsened, particularly in construction (83.7), which has been weak for three consecutive years since October 2022, and in electricity, gas and water supply (73.7), where seasonal demand is expected to decline. All subcategories of the BSI surveyed in September also showed negative outlooks. Domestic demand (91.7), exports (92.6), and investment (90.6) have all remained weak for 1 year and 3 consecutive months since July 2024.
Lee Sangho, head of the Economic and Industrial Division at the FKI, said, "Our economy is facing a double challenge of growing trade uncertainty for key export items such as semiconductors and sluggish domestic demand due to the prolonged downturn in the construction sector. The government and the business community need to work together as one team to proactively respond to rapidly changing international conditions and boost domestic demand by increasing investment in construction and infrastructure."
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