"Semiconductors Are Booming, but Why Has Business Sentiment Remained in a Deep Freeze for Four Years?"

FKI Survey: February BSI Outlook at 93.9
Remains Below Baseline (100) for 3 Years and 11 Months
Simultaneous Weakness in Manufacturing (88.1) and Non-Manufacturing (99.5)

Despite robust exports in the manufacturing sector, including semiconductors, the overall business sentiment among companies has remained sluggish for nearly four years. High exchange rates and forecasts of slower economic growth in major countries have been identified as factors dampening business confidence.

According to a survey conducted by the Federation of Korean Industries (hereinafter referred to as FKI) on the 600 largest companies by sales, the Business Survey Index (BSI) outlook for February 2026 was recorded at 93.9. Since April 2022 (99.1), the index has remained below the baseline of 100 for 3 years and 11 months in a row.

The BSI outlook is an economic sentiment indicator based on a survey of entrepreneurs regarding their business activities and economic prospects. A reading above 100 indicates expectations of economic improvement, while a reading below 100 signals pessimism. The actual BSI for this month was 93.4, confirming four consecutive years of weakness since February 2022 (91.5).

By sector, both manufacturing (88.1) and non-manufacturing (99.5) saw their February BSI outlook remain below the baseline of 100, continuing the simultaneous downturn. In particular, the manufacturing BSI fell by 3.7 points from the previous month (91.8), dropping into the 80s. However, the non-manufacturing BSI rose by 0.6 points from the previous month (98.9), approaching the baseline of 100, showing a somewhat contrasting trend. Manufacturing has remained below the baseline for 1 year and 11 months since April 2024, while non-manufacturing has been below the baseline for 2 consecutive months since January 2026.

Among the 10 detailed manufacturing sub-sectors, three-food, beverages and tobacco (100), wood, furniture and paper (100), and pharmaceuticals (100)-maintained a steady outlook. However, the remaining seven sub-sectors, including textiles, apparel, leather, and footwear (73.3), are expected to face deteriorating business conditions, dragging down the overall index. The outlook for the electronics and telecommunications equipment sector, which includes Samsung Electronics and SK Hynix, also looks bleak at 73.3.

This result is in stark contrast to the recent sharp rise in stock prices of major manufacturing companies dominating the upper ranks of the KOSPI by market capitalization. Park Yongmin, head of the Economic Research Team at FKI, explained, "Even large companies like Samsung Electronics and SK Hynix have only one vote each in the BSI survey, so even if some companies are optimistic, the overall business sentiment in the sector may differ." FKI attributed the negative impact on corporate sentiment to a reduction in working days in February, high exchange rates, and slower economic growth forecasts in major countries as both internal and external risks.

Among the seven detailed non-manufacturing sub-sectors, only electricity, gas, and water supply (115.8), which is expected to see seasonal demand growth, showed a positive outlook. Three sub-sectors-construction, transport and storage, and leisure, accommodation, and food service-hovered around the baseline (100), while the remaining three, including professional, scientific, technical, and business support services (85.7), are expected to face deteriorating business conditions. The construction sector recovered to the baseline (100) for the first time in 3 years and 5 months since September 2022 (102.7).

By category, negative outlooks were recorded across all seven major categories, including the three key areas of domestic demand (92.0), exports (93.1), and investment (95.8). The simultaneous downturn in domestic demand, exports, and investment has persisted for 1 year and 8 months since July 2024.

Lee Sangho, head of the Economic and Industrial Division at FKI, stated, "Due to the prolonged economic downturn, many companies are experiencing extremely poor business performance," emphasizing, "It is necessary to improve business sentiment by continuously monitoring external risks and easing domestic regulatory burdens."