Korean Business Sentiment Rises to Near Four-Year High in August on Vacation-Season Service Gains: BOK
Key Takeaways
- •Korea's Composite Business Sentiment Index rose 1.1 points to 99.6 in August, its highest level since September 2022, though still slightly below the neutral threshold of 100.
- •The manufacturing index gained 0.6 point to 103.8, staying above 100 for the fourth consecutive month, while the non-manufacturing index added 1.5 points to 96.7.
- •The Bank of Korea said non-manufacturing sentiment, covering sectors such as transportation, leisure, broadcasting, and film, improved during the peak summer vacation season.
- •Companies' forward-looking assessment for September strengthened 3.1 points to 99.6, up from the previous month's projection of 96.5.
- •The Economic Sentiment Index, which reflects sentiment among both consumers and businesses, rose 1.5 points to 99.4 in August.
Korea's business sentiment climbed to its highest level in nearly four years in August, driven by solid confidence in the manufacturing sector and an improved outlook for services during the summer vacation season, a Bank of Korea survey showed Wednesday.
The Composite Business Sentiment Index (CBSI) for all industries stood at 99.6 in August, up 1.1 points from the previous month, according to data released by the Bank of Korea (BOK). The reading marked the highest level since September 2022, when the index reached 102 following the COVID-19 pandemic.
The index gauges corporate outlooks on overall business conditions, with a reading below 100 indicating that pessimists outnumber optimists. At 99.6, the August figure shows firms' views were almost evenly balanced, sitting just below the neutral threshold. Because the survey is published monthly, the CBSI offers a more frequent read on corporate mood than the bank's quarterly growth data, making it one of the most timely barometers of near-term business conditions in Korea.
The central bank said sentiment in the non-manufacturing sector, which includes transportation and leisure as well as broadcasting and film, improved during the peak summer vacation season.
By sector, the CBSI among manufacturers climbed 0.6 point from a month earlier to 103.8 in August, while the index for non-manufacturing companies added 1.5 points to 96.7. The manufacturing index surpassed the 100 mark for the fourth consecutive month, having topped the threshold in May for the first time since August 2022. That leaves manufacturers in optimistic territory while non-manufacturing firms remain slightly below the neutral line, though their reading moved closer to it. Manufacturers' readings draw particular attention in Korea, where exports are a key growth driver for the economy.
The outlook for September also strengthened. Companies' forward-looking assessment rose 3.1 points to 99.6, up from the previous month's projection of 96.5, the survey showed, matching the current overall August reading.
Separately, the Economic Sentiment Index (ESI), which reflects sentiment among both consumers and businesses, rose 1.5 points to 99.4 for August. The composite measure combines the business survey with the bank's monthly consumer sentiment survey, giving a broader picture of mood across companies and households.
Source: The Korea Times
