Textile BSI Drops from 89 to 58
Sluggish Consumption and High Exchange Rates Overlap
The Daegu Chamber of Commerce and Industry (Chairperson Park Yoonkyung) announced on the 28th that it recently conducted a Business Survey Index (BSI) survey of 210 local companies (160 in manufacturing and 50 in construction).
According to the survey results, the manufacturing BSI for the first quarter of 2026 was '66', up 6 points from the previous fourth quarter, while the construction BSI was '52', up 4 points. In manufacturing, the downward trend that had continued since the second quarter of 2024 showed signs of easing, and in construction, the index, which had dropped to 48 in the fourth quarter of 2025, recovered to the 50s, indicating that additional downward pressure has somewhat eased.
When manufacturing was broken down into export-oriented and domestic-oriented companies, the BSI for export-oriented companies in the first quarter was 61, up 6 points from the previous quarter, and for domestic-oriented companies, it was 67, up 5 points.
By major manufacturing sectors, the machinery and equipment sector recorded 91, up 32 points from the previous quarter (59), due to expectations for increased demand for automation and process efficiency, as well as a gradual resumption of equipment replacement and supplementation by companies. The auto parts sector also rose 28 points to 55 from the previous quarter (27), due to the retroactive application of the 15% tariff, which was lowered by 10 percentage points in November, and a base effect following severe sluggishness in the previous quarter. However, the textile and apparel sector dropped 31 points to 58 from the previous quarter (89), due to delayed recovery in clothing and fashion consumption, cost burdens from high exchange rates, and limits in passing on price increases.
The construction Business Survey Index (BSI) showed increases in all areas except for 'construction material prices', presenting a somewhat positive outlook for the first quarter, in contrast to the previous quarter's forecast. The number of construction orders and the value of construction orders rose by 10 and 18 points, respectively, to 58 and 62. The supply of construction materials increased by 14 points to 80. Labor supply and construction profitability rose by 10 and 18 points, respectively, to 82 and 58. Corporate profits and financial conditions also increased by 12 and 24 points, respectively, to 54 and 66. 'Construction material prices' remained unchanged from the previous quarter at 62.
Meanwhile, the survey also asked about the achievement of management performance targets and factors affecting operating profit in 2025. First, 70.0% of respondents said that this year's sales fell short of the initial target ('more than 10% shortfall' + 'within 10% shortfall'), 24.8% said they achieved their annual target, and only 5.2% said they exceeded it.
Regarding operating profit, 76.7% of respondents said they fell short of the initial target ('more than 10% shortfall' + 'within 10% shortfall'), 20.0% said they achieved their annual target, and only 3.3% said they exceeded it ('more than 10% above target' + 'within 10% above target').
The most frequently cited factor burdening operating profit was 'fluctuations in raw material prices' (62.9%), followed by 'labor cost burden' (49.5%) and 'exchange rate factors' (21.0%).
Lee Sanggil, Executive Vice President of the Daegu Chamber of Commerce and Industry, said, "Local companies are forecasting a difficult first quarter in 2026 due to unstable domestic and international conditions, such as reduced exports caused by the global economic slowdown, increased import costs for raw materials due to high exchange rates, contraction in the housing market, and delays in sales and construction starts." He emphasized, "As structural cost pressures such as fluctuations in raw material prices and labor cost burdens continue, policy support is needed to ease the burden on companies."
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