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

FKI Survey: February BSI Outlook at 93.9
Below Baseline (100) for 3 Years and 11 Months
Simultaneous Downturn 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 key factors dampening corporate sentiment.

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

The BSI outlook is an economic sentiment index derived from asking business leaders about their current management activities and economic outlook. A reading above 100 indicates optimism, while a figure below 100 signals pessimism. The actual BSI for this month was 93.4, confirming a four-year streak of sluggishness since February 2022 (91.5).

By sector, both manufacturing (88.1) and non-manufacturing (99.5) BSI outlooks for February fell below the baseline of 100, continuing a simultaneous downturn. Notably, the manufacturing BSI dropped by 3.7 points from the previous month (91.8), falling into the 80-point range. 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. The manufacturing sector has remained below 100 for 1 year and 11 months since April 2024, while the non-manufacturing sector has been below 100 for 2 consecutive months since January 2026.

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

This result stands in stark contrast to the recent sharp rise in stock prices of leading manufacturers dominating the KOSPI by market capitalization. Park Yongmin, head of the FKI Economic Research Team, explained, "Even large corporations like Samsung Electronics and SK Hynix have only one vote each in the BSI survey, so even if some companies have a positive outlook, the overall business sentiment in the sector may differ." The FKI interpreted that reduced working days in February, high exchange rates, and slower economic growth forecasts in major countries have negatively affected business sentiment due to both internal and external risks.

Among the seven non-manufacturing sub-sectors, only electricity, gas & water supply (115.8), which is expected to see seasonal demand growth, showed an optimistic outlook. Three sectors-construction, transportation & warehousing, and leisure, accommodation & food services-hovered around the baseline (100), while the remaining three, including professional, scientific, technical & business support services (85.7), are expected to face a downturn. 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, all seven major areas, including domestic demand (92.0), exports (93.1), and investment (95.8), showed negative outlooks. The simultaneous downturn in domestic demand, exports, and investment has continued for 1 year and 8 months since July 2024.

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